Revenue in the quarter is expected at 50 trillion won – in line with analysts’ forecasts and a 3 percent increase over the same period a year ago.
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According to a regulatory filing, Samsung estimates operating profit for the second quarter to be about 8.1 trillion won, or about $7 billion, above analysts’ expectations of 7.8 trillion won. In the same quarter previous year, the company had reported an operating income of 6.9 trillion won.
In revenue, it expects 50 trillion won, a rise of 3.01 percent.
That puts the Galaxy S7 on a sale pace that is almost twice as fast as that of last year’s Galaxy S6, which analysts estimate took about six months to hit 27 million unit shipments. The company also suffers from increased competition: from Apple at the high end of the market (although the American company faces criticism for a lack of innovation) and Chinese competitors at the other end of the market (like Huawei, Oppo and Lenovo). The company will report its official financial results late in July for its second quarter of 2016. Strong demand for the new flagships and relative weakness at Apple could be allowing Samsung to cut its marketing and promotional costs.
The analyst consensus from stock information provider WISEfn released a day before was 7.6 trillion won, 6.6 percent lower than the actual result.
The operating margin of Samsung’s mobile phone division rose from around 10 percent last year to about 15 percent in the first and second quarters this year.
It added the S7 edge – the more expensive of the two because of its curved touchscreen – would outsell its flat screen counterpart. It’s been two years since Samsung has seen a quarterly profit like that.
Shares of Samsung rose by 2% to 1,45 million won in Seoul.
So, less iPhones being sold means greater opportunity for Samsung to take a bite out of Apple’s share in the market.
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Keep in mind that these are just projections on Samsung’s part and that full earnings will be released later this month. However, the smartphone maker did not make available the breakdowns of its different business divisions or did not give figures for its net profit.
