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After peaking in mid-March as favorable reviews for the new
Galaxy S6 models boosted earnings hopes, the company's stock
price has languished and was down nearly 6 percent for the year
as of mid-day trade on Monday. Supply shortages for the
curved-screen S6 edge and economic headwinds in Europe and China
have lowered expectations.
"After the first-quarter results the consensus for
second-quarter earnings was somewhere in the high 7 trillion won
($6.22 billion), but now I think so long as the first digit
doesn't start with a six it won't be a shock," HDC Asset
Management fund manager Park Jung-hoon said.
The average forecast from a Thomson Reuters I/B/E/S survey of 39
analysts tips April-June operating profit at 7.2 trillion won,
the same as a year earlier and up from 6 trillion won in
January-March. Of those surveyed, 20 have cut their forecasts in
the past 30 days by an average of 3.9 percent.
Samsung is expected to guide its second-quarter revenue and
profit on Tuesday, with full results to follow at end-July.
To be sure, analysts say the trend of gradual earnings recovery
remains intact. The Thomson Reuters I/B/E/S survey tips 2015
profit to recover to 27.8 trillion won from the three-year low
of 25 trillion won in 2014. Third and fourth-quarter profits
this year are expected at 7.3 trillion won and 7.5 trillion won,
respectively, posting significant gains in annual terms.
Samsung expects the new phones to be their best-selling devices
to date. Data from researcher Counterpoint released in June
showed that Samsung sold 6 million S6 smartphones from the April
10 launch to the end of the month, outpacing the previous S5
model in the same time frame.
But analysts say Samsung's failure to anticipate demand for the
S6 edge led to a missed opportunity. Though the firm says it now
has enough capacity to meet demand for the curved-screen model,
its flagship phones will soon need to compete with new Apple Inc
iPhones that analysts expect will launch as early as September.
"As the smartphone market matures, the period of time that
consumer demand for a high-end product lasts looks to have
gotten shorter," KTB Investment analyst Jin Sung-hye said in a
report, cutting her 2015 Galaxy S6 shipments forecast to 45
million from 49 million previously.
(Editing by Stephen Coates)
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