Samsung Electronics likely to see profits dip for second quarter Underperforming smartphone business seen as cause of fall

Samsung Electronics will see its profit drop for the second consecutive quarter in the April-June period mostly due to slow smartphone sales, according to market analysts Friday. 

They said the profit decline in the second quarter was largely attributable to the lower performance of its mobile business unit, whose operating profit accounts for more than 60 percent of the tech giant’s overall profit. 

“Even though the profits of semiconductor, display and consumer electronics businesses will likely grow in the second quarter, the firm’s mobile business unit will see its profit decline due to the lackluster sales of mid-range smartphones and tablet PCs,” said Song Myung-sup, an analyst from HI Investment & Securities in his financial report.

He projected that the firm would record 7.9 trillion won ($7.8 billion), down from 9.5 trillion won in the second quarter of last year while the sales would decrease to 51 trillion won from 57 trillion won. 

Investment and securities firms have recently started releasing financial reports in which they forecast the second-quarter profit of Samsung Electronics would record around 8.5 trillion won, lower than the 10 trillion won market consensus predicted earlier this year. 

The disappointing sales of the Galaxy S5 smartphone are also said to have contributed to the erosion of the tech giant’s profit margin.

Hwang Min-sung, analyst from Samsung Securities, forecasted the tech giant will have shipped 77 million units of smartphones in the second quarter, lower than a previous estimate of 83 million units.

Samsung’s share in the world’s smartphone market will drop to 30 percent in the same period, down from 34 percent in the first quarter, he added.

It is, however, expected that Samsung will be able to see its profits improve in the third quarter on the back of the launch of new high-end phablet, the Galaxy Note 4, and wearable devices. 

The robust chip businesses, especially the one for DRAM, will also give further impetus to Samsung to improve its quarterly sales and profits.

“The revenue of the firm will likely increase to 58.8 trillion won with an operating profit of 9.1 trillion won in the third quarter,” said Lee Jung, an analyst at Eugene Investment & Securities.

The electronics firm is slated to issue its preliminary financial statements, in which the firm unveils its sales and operating profits during the second quarter, in the second week of July.

By Kim Young-won (wone0102@heraldcorp.com)

Hyundai Motor tops U.S. quality survey for mass market brands

Hyundai Motor, South Korea’s largest carmaker, reclaimed the No. 1 ranking in J.D. Power’s latest quality study after being nudged out in 2009, the company said Thursday.

The 2014 initial quality study (IQS) by the U.S.-based global marketing company showed Hyundai Motor receiving 94 points, leading the pack among 20 high-volume brands examined.

The top ranking represents the first time the company has retaken the title since 2009. It also marks an improvement from the fifth-place finish for mass market car brands that Hyundai received in 2013. In that year, the company received 106 points. 

Besides Hyundai, its smaller affiliate, Kia Motors Corp., ranked third on the list, just below Toyota and above Chevrolet and Honda.

Hyundai and Kia are flagship companies of Hyundai Motor Group, the world’s fifth-largest automotive conglomerate. 

The Hyundai Genesis ranked first in the midsize luxury segment for the second year in a row, with the subcompact Accent and Elantra compact topping their respective fields in the latest quality report. (Yonhap)

Haren helps Dodgers edge Diamondbacks 6-4

LOS ANGELES (AP) ― Dan Haren pitched into the seventh inning and hit a tiebreaking three-run double, leading the Los Angeles Dodgers to a 6-4 victory over the Arizona Diamondbacks on Saturday night.

Dee Gordon hit a rare home run for the Dodgers, who are 10-3 against the Diamondbacks and 27-30 against everyone else. With six games left between the NL West rivals, this is the earliest the Dodgers have ever clinched a season series with Arizona. They began the year by sweeping a two-game set in Australia.

Texas Rangers outfielder Choo Shin-soo scores a run in the sixth inning on Saturday. The Korean went 1 for 3 with a walk. (AFP-Yonhap)

Haren (7-4) allowed three runs and eight hits, including a one-out single in the seventh by pinch-hitter Jordan Pacheco that chased the former Diamondbacks right-hander. Haren, coming off a 6-2 victory last Monday at Cincinnati, has won back-to-back starts first the first time since beating Arizona by identical 8-6 scores in a span of seven days in April.

Kenley Jansen got three outs for his 19th save despite giving up a leadoff homer in the ninth by Martin Prado ― his third hit of the game and 1,000th of his career.

Arizona right-hander Josh Collmenter (4-4) gave up six runs and eight hits through six innings. He is winless in three starts since his three-hit shutout against the Reds on May 29.


Martin lifts Rangers 
SEATTLE (AP) ― Leonys Martin hit a run-scoring single with two outs in the ninth to send the Texas Rangers past the Seattle 4-3 Saturday night, extending the Mariners’ losing streak to five games.

Luis Sardinas singled off Fernando Rodney (1-3) with one out in the ninth and moved to second on a groundout. Martin then hit a grounder just past the glove of a diving Kyle Seager at third base, scoring Sardinas without a play at the plate.

Neal Cotts (2-3) earned the win with 1 2/3 innings of relief, striking out four. Joakim Soria pitched a perfect ninth for his 15th save in 16 chances.


Rockies stun Giants
SAN FRANCISCO (AP) ― Brandon Barnes isn’t a classic power hitter. In fact, neither of the Colorado right fielder’s two home runs this season even left the park.

They did help the Rockies to victories, however, and for that Barnes isn’t making any apologies. Barnes hit a two-run, inside-the-park home run in the ninth inning and Colorado rallied for the second straight day to stun the San Francisco Giants 5-4 on Saturday.

Charlie Blackmon singled with two outs off Giants closer Sergio Romo (3-3) before Barnes lined a hit to center field. San Francisco’s Angel Pagan misplayed the ball and it skipped to the fence as Blackmon and Barnes raced around the bases.

Kansas City 9, Chicago White Sox 1 

Philadelphia 7, Chicago Cubs 4 

Baltimore 3, Toronto 2 

Cleveland 3, Boston 2 

Detroit 12, Minnesota 9 

Houston 7, Tampa Bay 3 

San Diego 5, NY Mets 0 

Pittsburgh 8, Miami 6 

Milwaukee 4, Cincinnati 2 

LA Angels 11, Atlanta 6 

St. Louis 4, Washington 1

Oakland 5, NY Yankees 1

[World Cup] Algerian coach calls Korea ‘better,’ still thirsts for victory

PORTO ALEGRE, Brazil -- Algerian coach Vahid Halilhodzic realizes the weaknesses in his young team, and he is not shy about praising his opponents. 

But his squad still thirsts for to secure its first World Cup win in three decades, he said Saturday, on the eve of the match between Algeria and Korea.

Algerian coach Vahid Halilhodzic (left) and Korean coach Hong Myung-bo. (Yonhap)

“I said … that the Algerian people needed this victory. But it will not be easy, because the Korean team is basically better than the Algerian team,” he said at a press conference in Estadio Beira-Rio, the venue for Sunday’s match. “In spite of everything, we will do our utmost for Algeria to win tomorrow. This will be the best present that I can give the Algerian people.”

Algeria hasn’t won a World Cup match since 1982, when it famously defeated the eventual finalists West Germany in the group stage. In the opener of their fourth World Cup appearance on Tuesday, the Fennec Foxes came close to that win when they opened the scoring against much-favored Belgium with a penalty conversion -- their first World Cup goal since 1986. They held the lead until the last 20 minutes, but a few critical errors eventually saw the Europeans snatch victory.

But with two matches left, Halilhodzic said he has forced himself to “forget Belgium ... and to give my attention to this match against Korea.”

Belgium leads Group H, followed by Russia and Korea, which are tied for second after their 1-1 draw. Algeria is blank on the scoreboard and would be eliminated with another loss.

He said in his months of studying the Korean team, he has noted the many “automatisms” that come naturally to the team that has been playing together for years -- half of the players were on the 2012 Olympic squad, and five played together on the 2009 U-20 World Cup squad.

“They’re structured, they’re well organized. Russia had a lot of difficulties to score and the draw was well deserved. Korea could have won, in fact. They’re fast, explosive, aggressive, they play a lot of pressing,” he said, adding that this, plus highly tactical play, led to the limited scoring opportunities in Korea’s draw with Russia last week.

Halilhodzic said he has to cope with the inexperience of his own team. The average age of the Algerian squad is 26.6 years, older South Korea’s 25.7, but its total number of international caps is the tournament’s lowest at just 364, far below Korea’s 591 and the World Cup average of 764.

He said there were critical things it still had to work on such as movement, speed and fitness. Earlier he suggested that his team needed to improve its physical condition by 30 to 50 percent. But their fatal weakness was not being able to defend while attacking, he said.

“It’s a bit premature to expect major achievements from this team, but we are making progress. I think we’ve paid a high toll for (our) mistakes,” he added. “As I said, this team is quite young, and I hope is drawing a lot of lessons from the last match to be able to contest with more composure.”

After Sunday’s match, Algeria sees Russia in Curitiba on June 26, 5 p.m. local time (June 27, 5 a.m. Korea time), while Korea faces Belgium in Sao Paulo.

By Elaine Ramirez, Korea Herald correspondent

Lewis takes lead at Women’s Open

PINEHURST, North Carolina (AP) ― Stacy Lewis had at least one thing in common with U.S. Open champion Martin Kaymer. She made it around Pinehurst No. 2 without a bogey Thursday in the opening round of the U.S. Women’s Open, and that put her in the lead.

That was about the only worthy comparison after one day of golf’s unique doubleheader.

Lewis managed to keep the stress at a minimum on a steamy morning in the North Carolina sandhills for a 3-under 67, giving her a one-shot lead over Michelle Wie when the opening round was halted because of storms in the area.

“It was such an easy day,” Lewis said, referring to her game more than the golf course. “I played really, really solid, other that I had to make a few par putts. But other than that, I didn’t put myself in too bad of spots and made a few birdies.”

Wie made four birdies on the back nine, and a 10-foot par save on the par-3 17th hole, for a 68.

Comparisons were inevitable for such an occasion ― the first time the U.S. Open and the U.S. Women’s Open were held on the same course in back-to-back weeks. Pinehurst No. 2 was 1,064 yards shorter than it was for the first round last week.

That didn’t make it any easier.

Lewis, the No. 1 player in women’s golf, and Wie were among five players who broke par when play was suspended with 30 players still on the course. Kaymer led 15 players under par in the first round last week. 

The scoring average for the women was 75.73, about 2 1/2 shots higher than the opening round for the men.

Lucy Li plays a shot on the 15th hole at the U.S. Women’s Open on Thursday. (AFP-Yonhap)

The show belonged to Lucy Li, the 11-year-old from the Bay Area who became the youngest qualifier in U.S. Women’s Open history. She missed only one fairway and was rarely out of position, though it cost the sixth-grader dearly when she was. 

Li made one triple bogey and two double bogeys, three blemishes on her card that led to a 78.

World Cup of big surprises smiles on Americas

RIO DE JANEIRO (AP) -- The World Cup of surprises is turning into a sweet samba party for teams from the Americas. 

Having already stunned one former world champion, little Costa Rica shocked another on Friday and sent a third one home. Then the French exploded with five goals against their Swiss neighbors. In the evening game, Ecuador downed Honduras 2-1. 

The story so far: Two European powers -- Spain and England -- are out of contention after just two games. European teams have played eight teams from the Americas and won just twice. The nine teams from Africa and Asia have contrived to win just one game between them. 

But for teams from the Americas, their record as of Friday against nations from other regions: played 12, lost just two. Ole! In short, the new world is embarrassing the old one. 

None of the previous seven World Cups in the Americas were won by teams outside Latin America. On current evidence, this one looks increasingly unlikely to be the exception. 

Ecuador`s national soccer players celebrate teammate Enner Valencia`s (not pictured) second goal against Honduras during their 2014 World Cup Group E soccer match at the Baixada arena in Curitiba on June 20. (Reuters-Yonhap)

Although the score was just 1-0, Costa Rica was a convincing winner Friday over four-time champion Italy in the coastal city of Recife. Having also won its first match, 3-1, against two-time winner Uruguay, Costa Rica is now guaranteed a spot in the knockout stage. 

Costa Rica‘s win also killed off England’s faint hopes of advancing. Italy and Uruguay will play each other Tuesday to determine which of them joins Costa Rica in advancing from Group D and which will join 1966 champion England and 2010 winner Spain in phoning their travel agents. 

Costa Rica, with just 5 million people, was seen as the easy opponent in the group -- the first ever with three former world champions. Instead, the Ticos have looked the hungriest team of the four, and are already preparing for a knockout game. 

The only two European nations to have beaten Americas teams so far in Brazil are France and Switzerland, which overcame Honduras and Ecuador, respectively, in their first Group E matches. On Friday, France and Switzerland played each other in Salvador, also on the coast. The French were rampant winners, 5-2, all but guaranteeing they, too, will advance to the last 16 for only the second time since they won the title in 1998. 

Switzerland coach Ottmar Hitzfeld tipped France to go “very far in this tournament” after it shredded his team‘s defenses and reputation as tough to break down. Five different players scored for France. 

If it stays on top of Group E, it will likely face Iran, Nigeria or Bosnia in the last 16. They should all be manageable opponents for the talented French who are rebuilding their reputation ruined by a training ground strike by players at the last World Cup. Friday marked the fourth anniversary of that debacle in South Africa. 

Attackers Olivier Giroud and Karim Benzema each scored one goal and created another against the Swiss. Benzema went 15 games without scoring for France in 2012-2013. He now is among just four players to have three goals in Brazil. 

“Karim is confirming that he’s in very, very good form. He‘s in great shape athletically,” said France coach Didier Deschamps. “Having such an efficient player is very important in a competition like this.” 

The outcome of Group E remains undecided even after Honduras’ loss in Curitiba to Ecuador, its second defeat of the tournament. France, with two wins and most goals scored and fewest allowed, is best placed to go through. 

Costa Rica had never beaten Uruguay in eight previous attempts or Italy in their only meeting in 1994. If it beats England in the teams‘ first-ever encounter next Tuesday, Costa Rica will complete a hat-trick of victories over those former champions with seven World Cup titles between them. 

Their victory over the Italians was no fluke. Italian goalkeeper Gianluigi Buffon made several diving saves. But he couldn’t reach Bryan Ruiz‘s pinpoint header in the 44th minute off Junior Diaz’s long, curling cross from the left. 

Costa Rica ground to a standstill as government employees took the day off to watch the game and many schools shut down shortly after the victory to allow children to join celebrations. Crowds shouting: “Yes, we did it!” blocked streets of downtown San Jose, the capital. In Brazil, players began to receive photos of the party on their smartphones. Costa Rica‘s only other appearance in the knockout phase came in its World Cup debut in 1990. It didn’t get beyond the group stage in 2002 and 2006. 

“It was the squad with the lowest profile in the group, but you don‘t advance on profile alone in big tournaments,” said Italy coach Cesare Prandelli.

The incredible South Korean hunt for the billionaire church leader who owned that ferry

BY TERRENCE MCCOY June 13  

Authorities raided a church on Wednesday in search of its co-founder, Yoo Byung-un, who is wanted on charges linked to April’s ferry sinking that left more than 300 people dead or missing.

How many cops does it take to capture a billionaire? In South Korea, thousands. And even that may not be enough.

But of course, Yoo Byung-un is no ordinary billionaire. The head of a South Korean family that allegedly operated the ferry that sank in April and tragically took the lives of hundreds of children is a man of flamboyance and controversy. He was once jailed for fraud. A photographer, he once held an exhibition under a pseudonym at the Louvre. And not to be forgotten, he is the co-founder of a sprawling church that owns the Web site www.god.com.

As South Korea continues to throb with anger over the sunken ferry, officials are trying to convict anyone connected to its sinking. Fifteen members of the ferry’s crew are currently on trial for charges ranging from negligence to homicide. Now the cops have put a $500,000 bounty on the billionaire, charging him with embezzlement, negligence and tax evasion.

This week, the government dispatched 9,000 cops and a helicopter to his sprawling church estate near Seoul, which critics say houses a cult called the Evangelical Baptist Church. It’s an organization known for its organic ice cream and produce, and populated by female sect members called “mamas,” Reuters’ Ju-Min Park reports. The cops said they needed so much manpower because of the compound’s sheer size. It covers 30 football fields. It’s got a fish farm, a cow ranch, a 5,000-seat auditorium.

But one thing it apparently didn’t have: a 73-year-old billionaire named Yoo Byung-un. Prosecutors contend two middle-aged “mamas” helped him escape.

Police say they needed so many men, the Associated Press reported, because some church members allegedly refused to let police into the compound last month and threatened to die as martyrs. Earlier this week, the AP said, more than 200 members protested the police, chanting hymns and thrusting their fists in the air. Meanwhile, separate members dispensed organic ice cream to the cops while police dogs sniffed for Yoo’s scent.

On Friday, there was still no sign of the billionaire, but police nabbed his elder brother, Yoo Byung-il. The reason behind the brother’s arrest, which went down near the church compound, was not immediately clear. Prosecutors haven’t disclosed any charges against him, but reports say he was arrested on embezzlement charges.

As for Yoo’s whereabouts, his church members aren’t talking.

“I don’t know where he is, but he won’t turn up until everything is clear about why the ferry sank,” a 30-year church veteran told Reuters. “I respect him as a mentor. He is our fellow believer and we will protect him.”

This not the first time Yoo’s church has been at the center of a melodrama. In 1987, 32 members committed suicide. They were found dead, bound and gagged at a Seoul factory. Yoo, who was never charged, denied complicity. “I feel really insulted just to think that people link me to the accident,” Reuters reported him telling the magazine Chosun in 1999.

This time, however, there’s a manhunt that’s taken investigators to remote southwestern towns and left many exhausted. Investigators sprawled out inside Yoo’s gym this week and napped.

South Korean President Park Geun-hye couldn’t believe the investigators didn’t bring him back. Nine-thousand cops couldn’t apprehend one billionaire? “It made no sense,” she kvetched.

Others couldn’t figure out why the government is expending so many resources trying to capture a man only tangentially related to the ferry sinking. Yes, he may have owned it, but does that mean he contributed to the tragedy?

“This is basically a financial case,” Yu Chang-seon, an independent political commentator, told Reuters. “We should be holding him responsible to some degree, but the scale of the whole thing is unprecedented.”

Terrence McCoy is a foreign affairs writer at the Washington Post. He served in the U.S. Peace Corps in Cambodia and studied international politics at Columbia University. Follow him on Twitter here.

•   SHARE ON FACEBOOK
•   SHARE ON TWITTER

In Sewol ferry case, Korean values and politics also on trial

As captain and 14 crew members of sunken ferry face charges in court, public demands government accountability

June 11, 2014 2:00PM ET

by E. Tammy Kim @etammykim

Two parallel tribunals have commenced in an unremarkable, blond-wood-paneled courtroom in Gwangju, South Korea. The first is the criminal trial of Capt. Lee Joon-seok and 14 crew members of the Sewol ferry, which capsized on April 16, killing nearly 300 people, most of them teenagers. The second proceeding is longer-term, more spectral in nature — a public indictment of the nation’s long-standing regulatory and political corruption.

On Tuesday, as 11 of the 15 defendants arrived to enter pretrial pleas of not guilty (the remaining four will appear next week), grieving family members and protesters surrounded the courthouse, wearing commemorative yellow ribbons, yelling curses and holding signs reading “You’re worse than animals!” and “The children’s souls are watching.” This scrutiny was not limited to the defendants, but extended to the fugitive ferry owner, the judiciary, public agencies and conservative President Park Geun-hye in equal measure. South Korea’s Twitterverse underscored this sentiment: “After the captain’s trial, Park Geun-hye should go on trial. Isn’t it obvious that she’s putting all the blame on the captain?” wrote Kwon Yo-seop, @anarchy9786.

Representatives of the Sewol victims have accused the government of numerous betrayals: a delayed, incompetent search-and-rescue effort; failure to apprehend Yoo Byung-eun, a religious leader and owner of the vessel’s operator, the Chonghaejin company (6,000 police officers raided his religious compound Wednesday); and a corrupt regulatory system that allowed the Sewol to carry far too much cargo and has permitted deadly safety problems to fester for decades.

“The Sewol incident has brought to light some of the structural failings of safety and regulatory agencies in Korea,” said Jeong-Ho Roh, director of the Center for Korean Legal Studies at Columbia Law School. “In the ’90s, there was that notion in Korea of quick economic development ... but now, at this point in time, it’s quite clear that that mentality of quick growth has got to stop and adopting standards that are international, that are safe, has to be the foremost priority.” The 1995 collapse of Seoul’s Sampoong Department Store, which killed over 500 people and injured nearly 1,000, still resonates with Koreans as a cautionary tale of rapid development and greed.

In a tearful speech delivered more than a month after the Sewol tragedy, President Park apologized to the Korean people and vowed to reorganize the government. Corruption and lax enforcement of regulations, she acknowledged, were the direct result of cozy relations between corporations and the state. With a score of 55 on a scale of 100, South Korea ranks among the middle range of states when it comes to perceived public-sector corruption, according to Transparency International.

While it had been widely expected that Park’s Saenuri party would fare poorly in local and provincial elections held June 4, results were mixed. And on the same day the Sewol trial began, in an apparent reassertion of her political will, she announced a new prime minister: a former newspaper editor known for his conservative views. 

Insofar as the ferry tragedy has become a universal lens for South Korean politics, all eyes are on the trial in Gwangju. Public sentiment, of course, has already entered a guilty verdict, raising the question of whether the defendants — some charged with homicide — will enjoy the kind of fair trial that offers, according to theorist René Girard, a “curative” substitute for mob violence.

The captain of the ferry has retained private counsel, and six public defenders have been appointed to the other 14 defendants, who have similar legal interests. It will be a bench trial, meaning that a judge will preside and rule on their guilt or innocence. Juries are not traditionally part of the South Korean legal system, though a limited system of “consultative juries” has been in place since 2007.

Political reforms in Korea will likely unfurl at an even slower pace than the trial. Perhaps fittingly, the name of the ferry, Sewol, translates roughly to “the passage of time.”

“Even though Korea has progressed quite rapidly, we have those leftover creeping problems like the revolving door,” said Columbia’s Roh. “I suspect that this particular incident will make us revisit the fundamental problems inherent in the way the government runs. In that regard, I think there might be some positive outcomes.”

SHARE THIS: