Reports of dwindling sales of the Galaxy S6 are not doing any favors for Samsung Electronics even as the company looks on track to report solid profit growth for the second quarter following last year’s troubles. The company’s stock price peaked in March following very favorable reviews for the Galaxy S6 and the Galaxy S6 edge but is down almost 6% for the year as of today, supply shortages for the Galaxy S6 edge and economic uncertainty in Europe and China are believed to be one of the factors behind this.
The forecast from a Reuters survey of 39 analysts predicts Samsung’s operating profit for the second quarter to come in at 7.2 trillion won, a significant improvement from the 6 trillion won operating profit posted in the previous quarter and matching the profit from Q2 last year. Of the analysts surveyed 20 have cut their forecasts in the past month by an average of 3.9%. Samsung is expected to issue earnings guidance for analysts this week with the full quarterly results to be announced by the end of this month. Analysts believe that the trend of earnings recovery will continue in subsequent quarters with third and fourth quarter profits for this year expected at 7.3 trillion won and 7.5 trillion won respectively which will register significant profit gains year-over-year.
Analysts are of the view that Samsung’s latest flagship handsets could have done much more for the company’s fortunes had Samsung anticipated huge demand for the Galaxy S6 edge, thus they believe that this was a missed opportunity for Samsung because even though it has enough capacity to meet demand now, it’s flagship handsets will soon have to compete with the new iPhones which will be out by September this year.
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