SEOUL Samsung Electronics Co Ltd expects its earnings for the second quarter to be "not that good", a senior company executive said on Wednesday, amid growing worries about weak sales for its key smartphone business.
Lee Sang-hoon, chief financial officer for the world's largest smartphone maker, made the remark to local reporters. A Samsung spokeswoman confirmed the comment and said the executive did not elaborate further.
Analysts have recently raised concerns that the company's cash cow handset business will disappoint amid intensifying competition and slowing smartphone market growth. The firm's shares closed down 1.9 percent on Wednesday, reflecting the pessimism.
"Chinese carriers' inventory adjustment of mid-to-low tier 3G phones and weak Galaxy S5 sell-through will likely limit second quarter smartphone shipments to 78.2 million units," Shinhan Investment said in a report, tipping a April-June quarter operating profit of 8.09 trillion won ($7.95 billion) compared with a 9.53 trillion won profit in the second quarter of 2013.
For the April-June period of this year, average forecast from 39 analysts surveyed by Thomson I/B/E/S tips the firm to report a 8.58 trillion won profit -- in line with a 8.5 trillion won profit reported for the January-March period.
StarMine's SmartEstimate, which gives greater weighting to the more accurate analysts, suggests further downside risk with a forecast for 8.05 trillion won profit for the second quarter.
Samsung is expected to give its earnings guidance for the second quarter in early July.
($1 = 1017.8000 South Korean Won)
(Reporting by Se Young Lee, editing by Louise Heavens)