Samsung Electronics prepared investors for a third straight quarter of disappointing earnings, warning on Tuesday that operating profits could fall by as much as 27%.
The company took the unusual step of issuing a one-page explainer in advance of its second quarter earnings report. It blamed disappointing sales on a wider slump in demand across Europe and Asia, combined with an unfavorable exchange rate that made its products more expensive relative to cheaper phones flooding the market.
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Samsung also said demand for tablets took a hit as sales of large smartphones, some with screens just an inch shy of tablets, cannibalized sales of its smaller, 7-to-8 inch tablets.
Samsung’s stock declined by 11% in the past month, though there are signs that investor pessimism may have bottomed out. The Wall Street Journal reports that the stock bounced back by a modest 2.1% in early trading Tuesday.
“The company cautiously expects a more positive outlook in the third quarter with the coming release of its new smartphone lineup,” Samsung concluded in its explainer.
