Analysts predicted KRW 7.4 trillion of operating income according to FactSet, a financial data provider.
Advertisement
Sales are expected to increase just slightly from sales of the previous quarter that were just over 49.8 trillion won.
The ratio of operating profits to sales for the second-quarter was the highest since the third quarter of 2013 when it logged 17.2 percent.
The shares slid 3.3 per cent to close Wednesday at 1.42 million won. The stock has climbed 15 per cent in 2016, putting it on track for its first annual increase in four years. However, the launch of the Galaxy S7 smartphone series in March has boosted the company’s sales performance.
This is in contrast to its American rival Apple, which in April reported its first quarterly revenue decline in 13 years and its first year-on-year drop in iPhone sales.
Even as growth in the overall smartphone market slows and consumers replace their smartphones less often, Samsung’s success shows that there is still money to be made by creating a product that still stands out, says Patrick Moorhead, principal analyst at Moor Insights & Strategy.
The company expects Q2 2016 operating profit to come in at about $7 billion, up a healthy 17% from the same quarter past year.
Samsung Electronics Co, the top smartphone maker, and memory chips manufacturer reported a huge operating profit in more than two years.
After one month of sales, analyst firm Counterpoint Research estimated that Samsung had shipped 10 million Galaxy S7 devices worldwide thus far, some 25 percent more than the Galaxy S6 did at the same point.
Samsung has held exclusive talks to supply OLED screens for iPhones due in 2017, people familiar with the matter have said. It was affirmed by Greg Roh, an analyst at HMC Investment Securities in Seoul. While higher smartphone ASPs are certainly a factor driving margin expansion, there could be some cost improvements as well. The forecast for operating profit is above expectations of analysts on Wall Street.
Advertisement
“At this point it appears unlikely that we’ll see stronger competing devices emerging (in the second half)”, IBK Asset Management fund manager Kim Hyun-soo said.
