Samsung Miss Spells Ill for Smartphones
NEW YORK (TheStreet) -- Samsung earned more than $8 billion in the second-quarter of 2013, an impressive figure but still considerably shy of analysts' estimates. Investors sent shares 4% lower in Korean trading on fear that Samsung's latest estimates are evidence of slowing growth in smartphones.
Although actual numbers won't be released until the end of the month, Samsung believes it will report an operating profit of $8.3 billion, up 8% sequentially, on $49.9 billion in revenue for the second-quarter of 2013. In the second quarter of 2012, Samsung reported an operating profit of $6.4 billion.
Results were aided in part by the release of Samsung's latest flagship smartphone the Galaxy S 4 -- a super-premium device running on Google's
Analysts were predicting as much as 6%-to-8% better than the estimates Samsung released today. The difference is largely due to slower-than-expected growth in Galaxy S 4. Samsung's handset division was responsible for more than 70% of the operating profit the company reported in the last quarter.
Last week, Samsung proudly boasted that it had shipped 10 million Galaxy S 4 handsets in the first 27 days and 20 million units of the top-of-the-line model in the first two months. Those numbers beat the previous record numbers for the Galaxy S III, Samsung's previous luxury model.
However, like chief rival Apple
As reported by TheStreet last week, the smartphone market increased 12% year-over-year to 31.6 million units in the quarter, the lowest growth rate since IDC started tracking the market in 2004.
Rival handset manufacturer, HTC also posted another round of disappointing numbers for 2Q/'13. Despite the release of its well reviewed HTC One smartphone, the company reportedly earned only $41 million (after taxes) from $2.35 in revenue. Analysts had predicted profits in the $70 million range. One year ago, HTC reported a $247 million profit on $3 billion in revenue.
HTC says it has shipped 5 million units of the the new One handset in the first 50 days since its release.
--Written by Gary Krakow in New York.