Samsung Q3 profit to drop 15%: Korean analysts

Summary:Korean analysts predict Samsung Electronics will see a 15 percent drop in profits for the third quarter of the year, reports ZDNet Korea’s Cho Mu-hyun.

According to financial information agency FnGuide, the average estimate for Samsung’s operating profit for the upcoming quarter by 26 securities firm was 8.59 trillion won ($8.43 billion), based on International Financial Reporting Standards (IFRS).

The figure is a 15.4 percent drop from the previous year’s 10.16 trillion won ($9.97 billion) for the third quarter. Average target stock price was 1.705 million won.

The highest estimate for operating profits was 9.27 trillion won while the lowest was 7.85 trillion won, but whichever way you cut it all are below last year’s figures.

The market concern over the Korean electronics giant’s earnings for the next quarter has heightened since it announced a 24.5 percent drop for the second quarter with operating profits of 7.2 trillion won ($7.1 billion) this year.

Samsung said the main causes were high marketing costs spent on moving inventory of low- and mid-end phones, and a strong Korean currency.

The company said new products launched in the second half will help it bounce back.

However, analysts say they may even lower their estimates further in the coming months, depending on market situations.

It is highly likely that Apple’s expected launch of the iPhone 6 in the fall and increased competition from other rivals will further dent Samsung’s earnings, they said.

Source: ZDNet Korea (zdnet.co.kr)

Topics: Mobility, Korea

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