Samsung Profit Falls Short of Estimates on Weak Phone Demand

Ruben Fields
July 6, 2018

After posting seven straight quarters of earnings growth, Samsung Electronics Co. Ltd.

However, either way, it looks like Samsung will be launching three flagship smartphones in 2019, similar to Apple's expected plan to unveil three new iPhone models this year.

The company's revenue was hit by slowing sales of its premium smartphones and reduced demand for its display panels.

The forecast came at the low end of market consensus, which averaged at 15.3 trillion won.

It was originally believed that Samsung would target a January launch for the S10, so that it could make up for the sluggish sales of the Galaxy S9.

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Sales are estimated at 58 trillion won, down 4.9 percent from 61 trillion won a year earlier.

"Overall, third-quarter profit will be stronger than the second quarter as Samsung will perform better in the semiconductor and display businesses", Song Myung-sup, an analyst at HI Investment & Securities, said.

Samsung's share price is down 2.4 percent at the time of writing, suggesting that investors haven't taken the news too well.

The won may also help Samsung to bounce back in the second half.

Still, the disappointing quarter is likely to be a temporary blip on Samsung's balance sheet, as analysts told the Financial Times they expect its profits to rebound in the second half of this year. Qualcomm will be the supplier of optical fingerprint sensors used in Samsung's new phones, while Chinese camera module maker O-Film will also supply key components. The only drawback is the new wide-angle camera is now planned on all Beyond models without autofocus and without OIS. The guidance, released Wednesday ahead of full earnings later this month, didn't provide specific divisional results.

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