Tech Giant Samsung’s Earnings Guidance To Miss Forecasts

Second quarter earnings for the world’s biggest smartphone maker, Samsung Electronics, are likely to miss expectations, the tech giant has said.

Samsung's Earnings Guidance

The South Korean company forecast that its operating profit from April to June is likely to fall 4% from a year ago to 6.9tn won ($6.13bn; £3.9bn), lower than forecasts of 7.2tn won.

Its sales also fell 8% to 48tn won, below expectations of 53tn won.

The company is struggling to see growth in a saturated smartphone market.

The launch of its latest flagship smartphone, the Galaxy S6, has been plagued with supply shortage issues, affecting its sales in the quarter, say analysts.

But Samsung has said that it has resolved the supply issue and expects the combined sales for the flat-screen and curved screen S6 models to hit a new sales record for the firm.

The earnings are expected to be the company’s highest quarterly profit since the same period last year.

Losing ground

Samsung has been facing stiff competition for its smartphones with US rival Apple at the top end and cheaper Chinese smartphone makers such as Xiaomi at the bottom end.

Andrew Milroy, tech analyst at consulting firm Frost & Sullivan said while Samsung had come out with innovative features such as curved edges on smartphones, the market was catching up with them.

“Some of the other innovations they’ve had – the big screens – other manufacturers have caught with that,” he told the Xul News.

“The larger screens was their biggest competitive differential in some of their models.”

Samsung shares closed up 0.8% after reversing early losses on the earnings guidance in Seoul.

The company’s final detailed results will be released at the end of this month.

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