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Samsung Electronics posts 8% fall in Q2 net profit

South Korean giant Samsung Electronics posted an 8.0 percent fall in second quarter net profit on Thursday and promised "flexible" pricing of its new flagship smartphone after less than stellar sales contributed to a slump in its mobile unit's earnings.

Samsung Electronics posts 8% fall in Q2 net profit

Seoul: South Korean giant Samsung Electronics posted an 8.0 percent fall in second quarter net profit on Thursday and promised "flexible" pricing of its new flagship smartphone after less than stellar sales contributed to a slump in its mobile unit's earnings.

The world's largest smartphone maker said net profit for the April-June period stood at 5.75 trillion won (USD 4.9 billion), down from 6.25 trillion won a year ago and slightly below analyst estimates.

The market reacted negatively, with Samsung shares down 2.5 percent in morning trade.

The conglomerate has now seen its net profit decline for five straight quarters year-on-year, mainly due to heightened competition in an increasingly saturated smartphone market that it had dominated for years.

Operating profit also shrank 4.03 percent from a year ago to 6.9 trillion won, while sales dropped 7.3 percent to 48.5 trillion won.

Samsung has faced a double challenge from US arch-rival Apple in the high-end smartphone market and rising Chinese firms like Xiaomi in the mid- and low-end market.

Hopes of a turnaround had largely been pinned on the sixth edition of its flagship smartphone launched in April.

The Galaxy S6 and S6 Edge with a wraparound screen received rave reviews, but company predictions of record sales fell short of expectations, partly due to production and supply constraints.

Operating profit in the mobile division was down 38 percent year-on-year in the second quarter at 2.76 trillion won.

The second half of 2015 would continue to pose "mounting challenges", the company said in its regulatory filing, with smartphone demand predicted to increase but at a lower rate.

"We will strive to maintain solid sales of high-end smartphones by flexibly adjusting S6 and Edge prices depending on marketing circumstances, while also launching new large-display models," Park Jin-Young, vice head of communications at Samsung's mobile division said during a conference call.

The company announced a mid-year dividend of 1,000 won a share compared with 500 won a year earlier.

In an effort to see off smaller rivals nipping at its heels in emerging markets, Samsung slimmed down its line of low- and mid-range smartphones last year, and ramped up production of those that remained in a higher-volume, lower-price strategy.

At the same time, booming memory chip sales have managed to mitigate some of the slump elsewhere, thanks to tight supply and strong pricing.