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Disappointing: Weak Profits for Samsung

by Caroline Vutagwa
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Samsung Electronics has given out its profits prediction that is weaker than what the market analyst had expected, even taking into account recent warnings of slowing sales and tighter margins.

The prediction estimated that in, samsung’s second-quarter functional profit will come in at US$8.3 billion, although analysts had expected a figure closer to US$13 billion.

The company’s shares continued to drop, slipping to 3% on the profits prediction on top of a 15% fall over the past month.

The biggest worry for Samsung is their momentum in the smartphone market is now at its peak, what the company should do is to hold onto its existing market share without cutting margins, or allowing a competitor to gain base.

The rumor that Apple is planning to expand its range of products to directly target Samsung have not helped, and the rise of low-cost Chinese vendors only adds to the pressure.

However, other analysts think the concern is exaggerated and that competitors would struggle to compete against Samsung’s global reach and huge marketing budgets.

Samsung intends to publish its final results later this month.


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