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Tech giant Samsung's earnings guidance to miss forecasts | Tech giant Samsung's earnings guidance to miss forecasts |
(about 2 hours later) | |
Second quarter earnings for the world's biggest smartphone maker, Samsung Electronics, are likely to miss expectations, the tech giant has said. | |
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. | 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. | 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 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. | 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. | The earnings are expected to be the company's highest quarterly profit since the same period last year. |
Losing ground | 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 BBC. | "Some of the other innovations they've had - the big screens - other manufacturers have caught with that," he told the BBC. |
"The larger screens was their biggest competitive differential in some of their models." | "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. | The company's final detailed results will be released at the end of this month. |