Samsung Electronics' sales and profits for the second quarter of this year took a steep dive compared to a year ago due to sluggish sales of smartphones.
The company on Tuesday said it posted W52 trillion (US$1=W1,012) in sales and an operating profit of W7.2 trillion from April to June this year.
Compared to the second quarter of 2013, sales dropped 9.5 percent and operating profit 15.2 percent. It is the first time in two years that operating profit fell below W8 trillion.
The biggest factor was the sluggish performance of its IT mobile division, which is in charge of smartphones. The arm made around W7 trillion in operating profit each quarter at one point, and accounted for 70 percent of the company's total operating profit. But the figure fell to around W4 trillion this second quarter.
Although semiconductors and TVs sold well, it was not enough to compensate for the fall in smartphone sales.
This not only affects Samsung Electronics but has a negative impact on the entire country's economy. The electronics giant accounts for 12 percent of Korea's manufacturing sales and pays 16 percent of all corporate taxes.
Adding affiliates and partner companies, the conglomerate's dominance is even more alarming.