Samsung Forecasts Q3 Profit Growth
Samsung has today released its earnings guidance for the third quarter, with its expected figures indicating a sharp turnaround year-on-year, along with quarter-on-quarter sales and profit growth.
The tech giant expects to post operating profit of approximately 7.3 trillion Korean won (around $8.72 billion), up from 4.1 trillion won year-on-year, with sales of approximately 51 trillion won up from 47.4 trillion won in the 2014 third quarter.
Samsung’s expected third quarter figures also represent growth from the 2015 second quarter, in which it posted operating profit of 6.9 trillion won and sales of 48.5 trillion won.
Samsung has in recent times faced increasingly still competition in the smartphone market in both the budget and premium categories,and a point of interest will be to see the
year-on-year progress of its IT & mobile communications
division in the third quarter. In the 2015 second quarter, Gartner found that while Samsung took out the number one smartphone vendor spot it saw its market share decline from 26.2 per cent to 21.9 per cent year-on-year, while recording a 5.3 per cent decline in unit sales.
Gartner noted that, despite the launch of Samsung’s new S6 models, its premium phones had continued to be challenged by Apple’s large-screen iPhones.
During the third quarter, Samsung released the Galaxy 6 edge+ and Note 5 smartphones, with Apple subsequently releasing its iPhone 6s and iPhone 6s Plus, creating further competition at the premium end of the market.
Meanwhile, at the budget end of the market, an ever-expanding range of low-cost Android handsets offer consumers more choice than ever.
As reported by The Wall Street Journal, analysts state that Samsung’s earnings are being powered by strong growth in its chip business, due to tight supply and firm pricing, with Samsung’s chip unit likely to have accounted for half of its profit in the third quarter.
The WSJ reported that analysts were expecting Samsung to post a 6.5 trillion won operating profit on revenue of 50.5 trillion won, based on a poll of nine analysts.