The Korea Herald


Samsung's Q1 profit forecast to gain 2.36 pct on-quarter

By KH디지털2

Published : March 31, 2015 - 10:00

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South Korean tech giant Samsung Electronics Co. is expected to see its first-quarter operating profit rise more than 2 percent on-quarter on strong performances of its flat-panel and chip divisions, analysts said Tuesday,

Samsung is likely to post an operating profit of 5.41 trillion won ($4.89 billion) in the January-March period, up 2.36 percent from the 5.29 trillion won posted in the fourth quarter of 2014, according to the median estimate of local analysts compiled by market tracker WISEfn.

The estimate still marks a 36.2 percent drop from the 8.4 trillion won posted in the January-March period of 2014.

The forecast, however, represents a 15.4 percent increase from the 4.6 trillion won outlook compiled at end-December, indicating that local analysts have become more upbeat about the tech giant's outlook.

Analysts attributed to the slight improvement to the favorable global price of liquid crystal displays, coupled with sound returns from the memory chip sector.

The initial shipment of the Galaxy S6, which will start its official sales on April 10, will also lend support to the first-quarter earnings, they said.

"The IT and mobile business will post solid earnings for the first quarter and show a clear upturn from the second quarter," said Lee Ka-keun, an analyst at KB Investment & Securities Co.

"Consumers are positive about the Galaxy S6 smartphone, and it is estimated that initial orders hover above previous models. It is also significant that people are preferring the Galaxy S6 Edge with 64GB and 128GB capacities over the basic 32GB Galaxy S6," said Lee Seung-woo, an analyst at IBK Investment & Securities Co.

Analysts predicted that Samsung will make a full-fledged recovery starting in the second quarter, when sales of the new Galaxy smartphones are reflected in its earnings report.

Other analysts, however, sounded a cautious note, saying the market should take a wait-and-see stance and investors should be aware of overheated optimism.

"The global demand for smartphones is slowing in March," said Lee Min-hee, an analyst at I'M Investment & Securities Co.

"Considering the limited demand for high-end smartphones and strong sales of the iPhone 6, expectations for the Galaxy S6 are excessive."

An analyst from Dongbu Securities Co. echoed the view, saying the new Galaxies have already been reflected in Samsung's share price and that the further growth will be limited.

Samsung Electronics is set to release its first-quarter earnings guidance next week. (Yonhap)