Instant View: Samsung Elec misses forecast, reports record Q2

SEOUL Fri Jul 5, 2013 6:33am IST

A customer shops for accessories for Samsung Electronics' mobile phone at a Samsung mobile shop in Seoul July 4, 2013. Samsung Electronics Co Ltd estimated its April-June operating profit rose 47 percent to a record 9.5 trillion won ($8.3 billion), lifted by the late April launch of its flagship Galaxy S4 smartphones. Picture taken on July 4, 2013. REUTERS/Kim Hong-Ji

A customer shops for accessories for Samsung Electronics' mobile phone at a Samsung mobile shop in Seoul July 4, 2013. Samsung Electronics Co Ltd estimated its April-June operating profit rose 47 percent to a record 9.5 trillion won ($8.3 billion), lifted by the late April launch of its flagship Galaxy S4 smartphones. Picture taken on July 4, 2013.

Credit: Reuters/Kim Hong-Ji

Related Topics

Stocks

   

SEOUL (Reuters) - Samsung Electronics Co Ltd (005930.KS) estimated its April-June operating profit rose 47 percent to a record 9.5 trillion won, lifted by the late April launch of its flagship Galaxy S4 smartphones.

Following are reactions from analysts and fund managers:

JEFF KIM, ANALYST, HYUNDAI SECURITIES

"We expect quarter-on-quarter operating profit to increase in the third quarter, as the mobile business is expected to save on marketing costs and increase margins.

"Also, the third quarter is usually a good season for component businesses such as semiconductors and display, and with Samsung's OLED business now fully loaded, displays are expected to bolster earnings.

"One of the biggest risks for Samsung Electronics going forward is that 70 percent of total operating profit comes from mobile business. Diversification is key. Samsung needs to engage in active business transition until end-2014.

"Wearable devices are the next stage in a saturated industry that needs constant innovation to survive. We'll see flexible smartphones in the fourth-quarter from Samsung and LG Electronics, and iWatch and Galaxy Watch are expected to be one of the first waves. There won't be many companies that will be able to dominate the wearable device market, such as Samsung, Apple and LG Electronics."

BYUN HAN-JOON, ANALYST, KB INVESTMENT & SECURITIES

"The (expected launch of) wearable devices won't be able to replace Samsung's smartphone business, but it's more likely to complement its earnings at best.

"Competition in the smartphone market will heat up in the current quarter as new smartphones come to the market. Although I cannot completely rule out the effect of Apple, Apple keeps releasing nothing particularly new, something similar to earlier models. Therefore, it's not likely to have a huge (adverse) impact on Samsung earnings."

NHO GEUN-CHANG, ANALYST, HMC INVESTMENT SECURITIES

"I think Samsung spent more on marketing expenses than expected because of the launch of Galaxy S4 smartphone, which led the company's results to miss the market consensus.

"Despite the possible launch of Apple's new models in the current quarter, I expect Samsung to decrease marketing expenses and to boost smartphone sales to 84 million units, which will lead to a mobile profit of 6.9 trillion won."

LEE SEI-CHUL, ANALYST, MERITZ SECURITIES

"The slowdown in its handset business appears to be worse than expected and the disappointing result simply reinforces the market view that Samsung's smartphone growth momentum is slowing," said Lee Sei-chul, an analyst at Meritz Securities.

"But it's got the component side of business, which is showing solid improvement, and a new handset product lineup for the third quarter, so (overall) earnings are likely to grow again in the current quarter."

(Reporting by Joyce Lee, Narae Kim, Hyunjoo Jin and Miyoung Kim; Editing by Edwina Gibbs and Stephen Coates)

FILED UNDER:
Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

TECH WRAP

Reuters Showcase

RK Laxman Dead

RK Laxman Dead

'Common Man' cartoonist RK Laxman dead at 93  Full Article 

Banking Revolution

Banking Revolution

India turns to corner shops, mobile phones for banking revolution.  Full Article 

Nuclear Group

Nuclear Group

China urges India to take steps to satisfy standards of NSG  Full Article 

U.S. Blizzard

U.S. Blizzard

Northeast U.S. braves 'crippling' blizzard, transit systems shut.  Full Article 

No Layoffs

No Layoffs

IBM dismisses Forbes report of massive layoffs.  Full Article 

Padma Bhushan

Padma Bhushan

India honours Bill Gates with civilian award  Full Article 

Fashionable Modi

Fashionable Modi

When Modi met Obama, his name was all over - his suit  Full Article 

Spielberg Speaks

Spielberg Speaks

Spielberg: 70 years after Holocaust Jews still face anti-Semitism.  Full Article 

Photo

Australian Open

Sharapova schools Bouchard to advance in Melbourne   Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage