Despite the fact that Samsung appears to be enjoying a turnaround due to its latest well-received smartphones, the Galaxy S6 and the Galaxy S6 Edge, doubts about sales are dampening expectations in the market.
Samsung stock down
Samsung’s stock peaked in March after almost universally good reviews for its new Galaxy S6 smartphones which boosted earnings hopes, but the company’s stock price has languished since then and down almost 6% as of Monday. Supply constraints with the curved S6 Edge and economic woes 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”, says HDC Asset Management fund manager Park Jung-hoon.
The South Korea electronics giant is expected to comment on its Q2 revenue and profit guidance this week, with results to follow at the end of July.
Samsung expects that their new phones will be their best selling devices to date. Furthermore, data from Counterpoint released last month indicated Samsung sold 6 million S6 smartphones from the launch in April to the end of the month, beating the previous S5 model.
Analysts however say that Samsung has not anticipated demand for the S6 Edge which led to a missed opportunity. The company says it has sufficient capacity to meet demand, but its flagship models will soon be competing with Apple’s new iPhone models that are widely expected to launch in September.
“As the smartphone market matures, the period of time that consumer demand for a high-end product lasts looks to have gotten shorter”, said KTB Investment analyst Jin Sung-hye in a report, reducing her 2015 Galaxy S6 shipments forecast to 45 million from 49 million.
SOURCE: Reuters.
Larry Banks is a keen follower of technology and finance. He has worked for a variety of online publications, writing about a diverse range of topics including mobile networks, patents, and Internet video delivery technologies.