SEOUL – Doubts over the sales prospects of Samsung Electronics Co Ltd's new flagship smartphones are damping expectations of a rapid turnaround for the South Korean giant, even though profit likely continues to recover from last year's troughs.
After peaking in mid-March as favorable reviews for the new Galaxy S6 models boosted earnings hopes, the company's stock price has languished and was down nearly 6 percent for the year as of mid-day trade on Monday. Supply shortages for the curved-screen S6 edge and economic headwinds in Europe and China have lowered expectations.
"After the first-quarter results the consensus for second-quarter earnings was somewhere in the high 7 trillion won ($6.22 billion), but now I think so long as the first digit doesn't start with a six it won't be a shock," HDC Asset Management fund manager Park Jung-hoon said.
The average forecast from a Thomson Reuters I/B/E/S survey of 39 analysts tips April-June operating profit at 7.2 trillion won, the same as a year earlier and up from 6 trillion won in January-March. Of those surveyed, 20 have cut their forecasts in the past 30 days by an average of 3.9 percent.
Samsung is expected to guide its second-quarter revenue and profit on Tuesday, with full results to follow at end-July.
To be sure, analysts say the trend of gradual earnings recovery remains intact. The Thomson Reuters I/B/E/S survey tips 2015 profit to recover to 27.8 trillion won from the three-year low of 25 trillion won in 2014. Third and fourth-quarter profits this year are expected at 7.3 trillion won and 7.5 trillion won, respectively, posting significant gains in annual terms.
Samsung expects the new phones to be their best-selling devices to date. Data from researcher Counterpoint released in June showed that Samsung sold 6 million S6 smartphones from the April 10 launch to the end of the month, outpacing the previous S5 model in the same time frame.
But analysts say Samsung's failure to anticipate demand for the S6 edge led to a missed opportunity. Though the firm says it now has enough capacity to meet demand for the curved-screen model, its flagship phones will soon need to compete with new Apple Inc iPhones that analysts expect will launch as early as September.
"As the smartphone market matures, the period of time that consumer demand for a high-end product lasts looks to have gotten shorter," KTB Investment analyst Jin Sung-hye said in a report, cutting her 2015 Galaxy S6 shipments forecast to 45 million from 49 million previously. –Reuters
About 92 News HD Live Main TV Channel of Pakistan:
92 News (also known as 92 News HD Plus (Channel 92) is a conservative Urdu language TV channel based in Lahore, Pakistan.
Mian Muhammad Hanif is the chairman of the channel.
This TV channel is a subsidiary of Madinah Group under Galaxy Media Group.
The channel's name, 92, is to celebrate the 1992 Cricket World Cup won by Pakistan. The number 92 is also the telephone country calling code of Pakistan, which is another major reason behind the channel's name.
92 News HD is Pakistan’s first HD Plus News Channel. Aims to bring credible & responsible News & important stories from Pakistan & around the World
We bring you Latest Pakistani and International News at 92 News Hd Plus to Read and Watch
We believe in genuine and true journalism, we do not prevail sensation just for ratings.
We do not hide news but never tend to add any unethical content or angling that goes against the norms of our religion Islam and Pakistan's culture.
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