Samsung Electronics' profit declines for a second consecutive quarter

Samsung Electronics Co., the world's largest smartphone maker, reported a second straight quarter of profit decline, mainly due to stagnating demand that pushed down prices for Galaxy devices and components.

According to Bloomberg, Suwon, South Korea-based Samsung Electronics said in a press release yesterday that first-quarter operating profit for the period ended at the end of March fell to 8.4 trillion won ($8 billion) from 8.8 trillion won a year earlier. That compared with an average estimate of 8.3 trillion won from 29 analysts surveyed by Bloomberg.

Samsung Electronics said quarterly revenue was about 53 trillion won, compared with an average estimate of 54 trillion won from 33 analysts surveyed by the market.

With the market saturated and Apple Inc. rolling out new iPhones, slowing sales of high-end products weighed on Samsung's profit, while Samsung shifted more focus to lower-priced devices.

As competition from manufacturers in mainland China eroded display profits, Samsung rolled out the Galaxy S5 and a diversified tablet lineup to stimulate demand.

Marcello Ahn, an analyst at Quad Investment Management in Seoul, said before the earnings release: "Samsung's smartphone sales strategy has shifted toward expanding its lower-priced product lineup rather than focusing on a single heavy-hitting model. Although slowing high-end demand pushed down the average selling price of smartphones, Samsung smartphones still outsold second-tier laggards."

At 8:17 a.m. Taipei time, Samsung Electronics shares fell 0.8% to 1386 won, trimming their gain this year to 1%. Samsung Electronics shares fell 9.9% last year, the biggest annual decline since 2008.

Because audited financial statements will be released later this month, Samsung did not disclose net profit figures or details of its business divisions' financial results yesterday.