Samsung On Course For Record $8.33 Billion Profit In Q2
Samsung has released its estimated earnings for Q2 2013, with a full announcement scheduled for later this month. The company estimates profits of $8.33 billion (9.5 trillion won), up nearly $2 billion over Q1’s $6.4 billion profit.
This would give the Korean company a 47 percent year-on-year increase in profit from a revised KRW6.46 trillion in Q2 2012 – slowing from the 54 percent growth it posted in Q1 2013 – and a 20 percent year-on-year increase in revenue from KRW47.60 trillion during the same period.
Analysts had expected a figure of more than 10 trillion won, and Samsung shares lost more than two percent in morning trade.
“Demand for high-priced, high-end smartphones shows slowing growth, which could hurt Samsung’s profit margin,” IBK Investment and Securities analyst Lee Seung-Woo told the Yonhap news agency.
Samsung has lost nearly 30 billion dollars in market value since mid-March, before it launched the Galaxy S4 smartphone a month later. Several brokerages have downgraded Samsung and their earnings forecasts for the company on fears that the S4 is not selling as strongly as hoped.
As Reuters reports, shares in the $185 billion company have dropped 15 percent since early June, hit by a series of brokerages downgrades. The share price reflects concerns about handset margins, with its mobile business generating 70 percent of the tech giant’s total profit.
Its share price woes equate to a fall in market value of 33 trillion won ($29 billion), almost equal to the combined market capitalisation of Sony Corp and LG Electronics Inc .
Samsung was expected to post higher earnings in the current quarter, as analysts were expecting strong smartphone sales to revive its growth exponentially.