Samsung confirms expectations for first annual profitsJason Furze (Author) Published Date : Jan 08, 2015 12:30 ET
South Korean tech giant, Samsung Electronics Co. Ltd has hinted that investors can now hope for a favorable outlook for the company, even though the global smartphone leader has been facing challenges in the decline of profit for a three-year running since 2011. The electronics and mobile company had consistently lost market share for three consecutive quarters up to July-September, and considering the stiff competition from Apple Inc s new iPhones and rival Chinese companies like Xiaomi Inc, the steady decline for Samsung may extend to the October-December quarter. But Samsung is not losing hopes, because its memory chip for mobile phones and other smartphones are in great demand, and this trend might help to check the season of profit losses for the company. According to Lee Do-hoon, a CIMB analyst, I think the company will show a turnaround, and this is largely because the foundry and display panel business for Samsung has picked up within the year. Samsung is hoping that its fourth-quarter operating profit might fall within 5.2 trillion won or $4.74 billion, and this exceeds the initial forecast of 5 trillion won earlier predicted by Thomson Reuters IBES survey of 44 analysts. Although the mobile and electronics company made a profit rebound of 4.1 trillion won in the third quarter the lowest quarterly result for over three years its 5.2 trillion won outlook would indicate that Samsung s 2014 profit could be in the neighborhood of 25 trillion won, and this is even still weak considering the losses in three years. However, the company should be releasing its annual profit figures by the end of January. There were concerns about the mobile division but it looks like the won's recent weakness against the dollar and the Galaxy Note 4 impact helped, said Greg Roh of HMC Investment, and this is in relation to the trading shares of 0.5% that Samsung had dealt vis- -vis a 1.1% increase in the general market. I expect profits to continue improving through at least the second quarter of 2015. The semiconductor division is actually doing well to help Samsung stay afloat, and combined with the high demand for its memory chips for PCs and smartphones, company is expected to still perform creditably well. Although profits from Samsung s mobile division dropped from 68% in early 2013 to 44% in the third quarter, the division performed well for its fourth quarter because of a boost in the sales of its Galaxy Note 4. It'd be hard to expect a sharp pickup in earnings from the mobile division in the absence of a hit product, said Baik Jae-yer of the Korea Investment Trust Management, HDC Asset Management fund manager Park Jung-hoon advised that What Samsung needs to show under the new regime of Vice Chairman Jay Y. Lee is stabilisation, and that includes earnings.
Samsung confirms expectations for first annual profits