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Samsung warns of poor Q2 due to slowing Galaxy S5 sales

Firm is also taking a battering in emerging markets
Thu Jun 26 2014, 12:29

samsung-galaxy-s5-smartphoneSAMSUNG HAS WARNED investors that its second quarter earnings will be "doesn't look too good", which could be due to slowing sales of the firm's Galaxy S5 smartphone.

Samsung CEO Lee Sang-hoon, warned on Wednesday that the firm's second quarter performance "doesn't look too good", Bloomberg reported, news which caused Samsung shares to fall a further 1.9 percent on the 8.5 percent dip the firm has already seen this month.

Sang-hoon didn't elaborate further, but some reports are claiming that sales of Samsung's Galaxy S5 - which the firm recently announced has shifted 11 million units - are slowing due to a decline in demand.

This likely is due to the recent slew of incoming flagship Android smartphones, such as the Xperia Z2, HTC One M8 and LG G3, and Electronista noted that bumper iPhone sales are also having a negative effect on sales of the Galaxy S5.

Korean brokerage firm KTB Investment and Securities also noted that Samsung's mid-range and low-end smartphones are not selling very well in emerging markets, with Nokia's Microsoft-owned devices division showing signs of dominance.

The brokerage cut Samsung's smartphone shipment forecast for the second quarter by 12.5 percent to 77 million, from its previous estimation of 88 million.

KTB analyst Hin Sung Hae said, "Strengthening competitiveness of local players in emerging markets are hurting sales of Samsung's lower-end smartphones," adding, "The main reason behind the lowered earnings estimate largely stemmed from weak smartphone sales."

Bloomberg reported that Samsung is expected to post an operating profit of $8.2bn for the second quarter, a far cry from the record $9.9bn profit the firm posted in the third quarter of 2013. µ

 

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