Samsung Profit Falls Short of Estimates on Weak Phone Demand

Friday, 06 Jul, 2018

The phones will offer a bunch of novel new features that have never been seen on a Samsung smartphone before, and now we have some new details about all three upcoming Galaxy S10 models.

Sluggish global smartphone sales are starting to crimp earnings at Samsung Electronics Co., which posted profit that fell short of estimates.

Operating profit for the three-month period is expected to come in at 14.8 trillion won ($13 billion) from 58 trillion won (£39bn) in revenues. This may mean that Samsung isn't too anxious about the low sales of this year's S9 models.

Samsung shares are down about 12 percent this year on concerns over slowing profit growth and a lack of technological innovation to drive smartphone sales.

Samsung was also hurt by a fall in prices for its liquid crystal display panels, which are used in both TVs and smart devices.

"While chip sales keep rising, smartphones aren't looking good", said Jung Sang-jin, a fund manager at Korea Investment Management.

Revenue likely came in at 58 trillion won ($51 billion), a decrease of almost 5 percent from a year earlier.

Samsung warned in April that second-quarter profits in its mobile business should decline sequentially. The guidance, released Wednesday ahead of full earnings later this month, didn't provide specific divisional results. Chinese companies have also been challenging Samsung in the LCD television market where the South Korean manufacturer leads.

"The won depreciation is working in Samsung's favor", said Claire Kim, an analyst at Daishin Securities Co.

The semiconductor business forms the largest portion of Samsung's profit.

Analysts have also lowered their views on Samsung, the Financial Times reported.