Smartphone makers Samsung and HTC reported preliminary second-quarter earnings with lower-than-expected sales and revenue Friday, raising concerns that the smartphone firms aren’t able to sustain the kind of growth that has helped them prosper.
Samsung offered its strongest-ever guidance, with expected sales of about $50 billion and a projected operating revenue of $8.1 billion to $8.3 billion. But that fell below analysts’ expectations of around $8.8 billion in revenue, according to Reuters.
HTC reported a net income of nearly $42 million, below expectations of around $66 million — and down 83 percent from the same period last year — despite glowing reviews of its HTC One smartphone.
The two companies are in very different positions in the smartphone world, with Samsung on top of the market and HTC struggling to stay in the game. But both face an issue that plagues the wider market — sales are slowing, and companies can’t keep up with sky-high expectations based on their growth of recent years.
Thursday’s results were particularly gloomy for HTC. The first to make phones running Google’s Android operating system, HTC has been slipping fast in the smartphone market. According to IDC, HTC was the fourth-largest smartphone manufacturer in 2012 but fell behind ZTE and Huawei during the final three months of the year.
— Hayley Tsukayama
l Chrysler is recalling 282,000 minivans from the 2013 model year because the side air bags can deploy on the wrong side in a crash. Side air bags are supposed to deploy on the side of the vehicle that is involved in a crash. Chrysler said a software problem is causing its air bags to deploy on the opposite side of the vehicle. Affected models are the Dodge Grand Caravan, Chrysler Town and Country and Ram Cargo Van.
l The Federal Communications Commission said on Friday that it approved SoftBank’s $21.6 billion bid for Sprint Nextel, completing the U.S. government’s review of the Japanese company’s investment in Sprint. SoftBank will have a 78 percent stake in the third-largest U.S. wireless carrier. The FCC also approved Sprint’s plan to buy the half of wireless operator Clearwire that it does not already own.
l British outsourcing group Serco has won a contract worth up to $1.25 billion with the U.S. Centers for Medicare and Medicaid Services, according to the federal contracting Web site. The deal to handle applications for qualified health plans, Medicaid and other insurance affordability programs will begin Oct. 1.
l U.S. airlines canceled more flights in and out of Mexico City’s airport on Friday as a precautionary measure as the nearby Popocatepetl volcano continued to emit vapor and ash. Alaska Airlines, United, Delta and AirTran canceled about a dozen flights, fewer than the number on Thursday, said Jorge Gomez, spokesman for Mexico City International Airport.
— From news services
l In Sunday Business: Hospitals explore the potential and pitfalls of becoming health insurers.
l Monday: Alcoa reports second-quarter results, kicking off the earnings season.