Samsung Expects Q3 Rebound With Surprise Profit Forecast
Samsung said it expects to beat analysts’ Q3 2015 forecasts when later this month it officially posts an 80 percent year-over-year operating profit to 7.3 trillion won, or $6.29 billion, driven by strong semiconductor and mobile device display sales.
Analysts were expecting Samsung to post an operating profit of 6.5 trillion won on sales of 50.5 trillion won for the period.
The mobile device maker projects Q3 sales to grow some 7.5 percent to 51 trillion won, or $44 billion. Samsung expects chip sales to generate its highest earnings for the fifth straight quarter. The Korean manufacturer has signaled in the last year that it intends to pump up its chip sales to offset steadily declining growth and amped up competition in the global smartphone market.
At the end of this month, Samsung is expected to post final audited results for the period ending September 30. The jump in Q3 operating profit would represent the vendor’s first operating profit growth in two years, breaking a streak of seven straight declining quarters.
Samsung didn’t offer a divisional breakdown of sales and earnings nor a company-wide net income figure as is its practice with preliminary quarterly guidance. Still, the positive outlook for the quarter suggests Samsung may have found a way out of the doldrums that beset its financial performance over the past two years as the company’s sales and profits shrank amid competition from lower-price mobile device makers.
The vendor’s new Galaxy S6 edge+ smartphone and Note 5 phablet, unwrapped in mid-August ahead of Samsung’s usual schedule, likely prompted its mobile division to perform better than in prior quarters. Two weeks after the devices’ introduction, Samsung offered Apple (AAPL) iPhone users a 30-day trial to test them in a no-strings attached promotion that costs users $1 to participate. It quickly followed up that offer with $200 in credits for potential buyers of one or more of the new devices.
According to analysts, for Q3 Samsung’s mobile unit probably posted an operating profit of about 2 trillion won, up from 1.75 trillion won last year, and its chip business likely generated 3.5 trillion won in operating profit, the Wall Street Journal reported.
