Samsung Electronics flags 4.2% drop in Q2 profit

Samsung Electronics on Tuesday flagged a second quarter drop in operating profit that missed analyst estimates after sales of its newest flagship smartphone failed to meet expectations.

In an earnings estimate, the giant South Korean smartphone and memory-chip maker predicted operating profit of around 6.9 trillion won ($6.1 billion) for the April-June period, down 4.2 percent from a year earlier.

That compared with the 7.2 trillion won average of 33 analyst estimates compiled by Bloomberg News, but still marked a 15 percent increase from the first quarter.

Tuesday's estimate, which comes ahead of audited results to be released later in the month, did not provide a net income figure.

It also gave no breakdown of divisional earnings.

The company has seen profits sag since late 2013 due to heightened competition in an increasingly saturated smartphone market that it had dominated for years.

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 high-end smartphone launched in April.

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

Overall sales were around 48 trillion won in the second quarter, Samsung said Tuesday, compared with the 53-trillion-won average of 37 estimates.