Samsung forecasts slowing profit growth for Q2, missing analyst estimates

Jul 06, 2018, 22:51
Samsung forecasts slowing profit growth for Q2, missing analyst estimates

It is not hard to imagine the reasons why Samsung is expected to experience a awful quarter, because according to analysts, the reason for the drop in profit is lackluster Galaxy S9 sales.

The rumours suggest that we may see a Gear S4 at the Galaxy Note 9 launch event in NY on August 9th.

Revenue likely came in at 58 trillion won ($51 billion), a decrease of almost 5 percent from a year earlier. On the other hand, its consolidated operating profit was at 14.8 trillion or US$13.2 billion. That's an increase of 0.71 trillion won in profits, but a 3 trillion won drop in sales compared to the same time past year, as Samsung missed estimates for the quarter that ended on June 30th.

Analysts expect Samsung's smartphone sales to drop in the April-June quarter, following a more than two percent drop in the previous quarter, as consumers flock to cheaper models from Chinese rivals such as Xiaomi.

The iPhone X's weaker performance also affects Samsung's bottom line, as its Display division is the sole provider of those expensive iPhone X OLED panels.

Moreover, the numbers are significantly worse than the first quarter, when Samsung reported 15.64 trillion won operating profit off 60.56 trillion won sales.

Recent reports have said the Galaxy S10 might come in three different sizes, with the largest one possibly sporting a triple camera setup at the back. The device will employ foldable display panels, which is expected to go into mass production this summer.

Flexible smartphones have been in works but we are yet to see a commercially available foldable smartphone in the market.

KitGuru Says: This is evidence of how competitive the smartphone space is getting when even Samsung are having issues selling their flagship devices. However, it didn't reveal any detail about its anticipated foldable handset.

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