Samsung expects record Q2 profit to miss analyst projections
The South Korean electronics giant says that profits will come in at a record $8.3 billion -- which will be short of analysts' projections of $8.8 billion.
Samsung expects to post another record operating profit for the second quarter but will miss analyst expectations amid concerns that sales of its Galaxy S4 fell short of analyst's sales expectations.
The South Korean electronics giant said Thursday its operating profit will come in around 9.5 trillion won ($8.3 billion) for the three-month period ended June 30. While a 47 percent increase over the year-ago period, the guidance came in below analysts' average forecast for an operating profit of 10.1 trillion won ($8.8 billion). Before a slight decline in the first quarter, Samsung had posted a string of five consecutive quarters of record profits.
More than a dozen analysts cut their earnings projections for the smartphone maker last month on worries that the flagship smartphone was nearing market saturation.
"It sharply missed the market expectation, and that worries me," Byun Han Joon, a Seoul-based analyst at KB Investment & Securities Co., told Bloomberg. "The market was initially concerned about the third- and fourth-quarter results, but today's news raises questions if the earnings are already in bad shape."
Samsung, which released the GS4 in April, boasted in May of having sold more than 10 million units to retailers and wireless operators less than a month after the handset's debut. While that mark made the Galaxy S4 the company's fastest-selling smartphone, it paled in comparison with the Apple iPhone 5, which sold 5 million units its first weekend on the market.
The company will announce full quarterly results July 26, just days after handset rival Apple reports its financial first-quarter results.