Samsung profits take a dip

Galaxy S5 design

Galaxy S5 Sales not helping

Galaxy S5 designThe latest financial results from the electronics giant, for the second quarter of 2014, show the first dip in net profit in three years for Samsung, and a noticeable reduction in its smartphone sales. From the results, the company announced it had made a net profit of 6.25 trillion won ($6.1 billion), down from 7.77 trillion won ($7.58 billion) last year. They also announced an operating profit of 7.19 trillion won ($7.02 billion) in the period — a 15% drop from last quarter — on revenues of 52.35 trillion won ($51.02 billion). The new emerging numbers show that Samsung’s operating profit has dropped almost 25% from the same quarter last year, falling from 9.53 trillion won ($9.27 billion) in the second quarter of 2013.

 In the recent past, the company has relied on its mobile business to bring in most of the cash, with an operating profit of 4.42 trillion won ($4.31 billion) on 28.45 trillion won ($27.72 billion) in revenue. What comes as no surprise, the company announced that its smartphone and tablet sales decreased. But Samsung blames these low sales to “traditionally low” second quarter market demand for part of the drop in sales, despite early indications that the launch of the Galaxy S5 would help Samsung boast sales.

Huawei eating Samsung’s ‘cake’

The company says the second half of 2014 will be “a challenge.” While the Korean company is still the global leader in smartphone shipments, upcoming Chinese manufacturers such as Huawei eat Samsung’s ‘cake” — as it almost doubled its number of phone shipments between 2013 and 2014 from 10.4 million to 20.3 million.

All hope is not lost, the company believes that its upcoming devices to the launched later this year will increase its smartphone and tablet sales. Will it be the Galaxy Note 4?