“For the medium term I think 4 trillion won (quarterly mobile) profit is the new normal”, Nomura analyst C.W. Chung said.
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According to a recent Samsung regulatory filing, it is estimating profit during its second quarter to be approximately 8.1 trillion won equal to $7 billion, which would be above the 7.8 trillion won analysts were expecting. That’s above the 7.8 trillion KRW predicted by analysts polled by Reuters, and that makes it the firm’s most lucrative period since Q1 2014.
The Samsung Galaxy S6 was not as popular as Samsung had hoped although it looks like things have changed with the new Samsung Galaxy S7.
Apple is set to report its June-quarter earnings later this month and it will certainly be interesting to see if things picked up like they did for Samsung, or if the South Korean company really is taking a bite out of Apple right now. It marked the first time in nine quarters that Samsung’s operating profit topped 8 trillion won.
In 2015, the company struggled to meet demand for smartphones with curved displays, but this year component supply issues have been resolved and some analysts believe the higher-priced S7 Edge smartphones, which feature curved displays, saw stronger performance than its sister phone with a flat screen.
In the absence of a new iPhone, many carriers boosted marketing spending to drive purchases of the S7, shifting the cost of promotion away from Samsung. The stock has climbed by 15% in 2016, putting it on track for their first annual increase in four years. This was triggered by the falling demand for personal computers and chip prices being pressured by smartphones.
Thursday’s forecast, which comes ahead of audited results to be released this month, did not provide a net income figure or breakdown of divisional earnings for the company’s mobile, TV, semiconductor, and display units. It was affirmed by Greg Roh, an analyst at HMC Investment Securities in Seoul.
Shares of Samsung have risen 13 percent in 2016, putting them on track for their first annual increase in four years.
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Its operating profit is the largest in about two years and beats what Wall Street had expected. “[However] I am not convinced such momentum can continue through the second half and next year”.
