Samsung Takes Another Hit

Samsung just reported another worse-than-expected quarter:

The company reported Wednesday that its January-March income was 4.63 trillion won ($4.35 billion), compared with 7.49 trillion won one year earlier.

That was lower than analysts’ consensus of 4.97 trillion won, according to financial data provider Factset.

Sales fell 12 percent from a year earlier to 47.12 trillion won while operating income dropped 30 percent to 5.98 trillion won, in line with Samsung’s earnings preview earlier this month.

The wider-than-expected drop in net profit was due to a big profit plunge in Samsung’s mobile business. The maker of Galaxy smartphones said its mobile division generated 2.74 trillion won in quarterly profit, compared with 6.43 trillion won a year earlier.

The new Galaxy S6 and Galaxy S6 Edge phones are supposed to be selling well, but apparently not well enough to bolster the company’s bottom line.

One good sign going forward is that I just checked on S6 prices, and they aren’t being discounted yet. If they finally have a phone built well enough to hold its value for more than a few weeks, the company has a good chance of getting back to its old profit margins in wireless.