Samsung
Elec tips higher second quarter profit on Galaxy S6
sales
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[April 29, 2015]
By Se Young Lee
SEOUL (Reuters) - Samsung Electronics Co
Ltd on Wednesday said it expects earnings to rise in the second quarter
after posting its highest profit in three quarters in January-March,
boosted by strong demand for its new Galaxy S6 flagship smartphones.
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Samsung's renewed focus on design after a period of stagnation in
its smartphone range appears to be paying dividends, with researcher
Strategy Analytics saying the South Korean giant overtook Apple Inc
<AAPL.O> as the world's top smartphone maker in the first quarter.
"Galaxy S6 sales have been going as well as expected, while demand
for the Galaxy S6 edge have been better than anticipated," Samsung
Vice President Park Jin-young said during a conference call.
The firm reported a January-March operating profit of 6 trillion won
($5.64 billion), in line with the 5.9 trillion won profit it had
guided for earlier this month and the highest in three quarters.
Earnings for April-June should continue to rise, it said, with the
two Galaxy S6 models - featuring new design flourishes like metal
bodies - likely to break the company's sales record.
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Samsung shares have slipped in recent weeks on concerns that the
Galaxy S6 phones, on sale since April 10, may not sell as well as
first hoped.
But executives on Wednesday sought to reassure investors that sales
were healthy so far and that supply problems associated with the
curved-screen S6 edge should be resolved in the current quarter.
"I don't see any devices within the current Android camp that could
stand as an alternative to Samsung's high-end smartphones," Daewoo
Securities analyst Jonathan Hwang said.
Samsung's mobile division's January-March operating profit improved
to a three-quarter high of 2.74 trillion won.
But the chips business remained the top earner at 2.93 trillion won,
thanks in part to surging orders from smartphone makers including
Samsung itself. The company said it expected robust chip sales to
continue in the April-June period.
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Even so, few expect Samsung to return to the record profits of 2014
given intensifying competition in the global smartphone market.
Apple topped Wall Street's profit forecasts on Monday as it sold
more iPhones in China than the United States for the first time.
Samsung also warned that the typical industry pattern of a stronger
second half may not be as pronounced this year due to risks like the
weaker euro and emerging market currencies.
The median forecast from a Thomson Reuters I/B/E/S poll of 49
analysts tips Samsung's 2015 profit at 27.7 trillion won, up 10.8
percent from 25 trillion won in 2014.
(Editing by Stephen Coates)
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