The biggest smartphone manufacturer in the world – Samsung Electronics Co. Ltd made an announcement, confirming the initially reported data by a South Korean media that it expects its performance over the second quarter of the current financial year to be problematic due to increasing competition, which affects the profit growth of the companys mobile unit.
The Chief Financial Officer of the company – Lee Sang Hood said in front of reporters at the headquarters of the company in Seoocho that Samsungs earnings over the period ending June are expected to be “not that good”. Samsung Electronics CFO did not disclose any further information about the companys results. Analysts projected that the company will post an operating profit of 8.4 trillion won (8.2 billion dollars) over the second quarter ending June.
The operating profit of Samsung Electronics has been reported to be falling over the past two quarters mainly because margins have been affected by fierce rivalry in the high-end smartphone arena.
The projection of both analysts and the companys executive were commented by one of the analysts, who work at KTB Investment & Securities – Jin Sung Hae in a report that was cited by Bloomberg: “Strengthening competitiveness of local players in emerging markets are hurting sales of Samsung’s lower-end smartphones. The main reason behind the lowered earnings estimate largely stemmed from weak smartphone sales.”
KTB Investment & Securities, which is situated in Seoul, shrunk its forecast for the operating profit of Samsung over the second financial quarter by 10% to 7.99 trillion won. Such a result would be equal to a 16% decline from operating profit that amounted to 9.5 trillion won for the same period a year ago. It also reduced the projection of the companys smarthone shipment for the period by 12.5% to 77 million units.
Samsung Electronics Co. Ltd was 1.74% up to close at 1,345,000 South Korean won per share yesterday, marking a one-year change of +3.70%. According to the information published on the Financial Times, the 42 analysts offering 12 month price targets for have a median target of 1,750,000, with a high estimate of 2,200,000 and a low estimate of 1,150,000. The median estimate represents a 30.11% increase from the last price of 1,345,000.
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