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The shares of Samsung took a dip past week due to the negative response towards it unimpressive performance in the second quarter of 2018. The lower than expected profits could be attributed to the slow sales of the company’s latest flagship, the Galaxy S9.
Samsung Expected to Generate Hefty Sales Numbers Through Galaxy Note 9 Release, Rising DRAM Demand and Supplying OLED Technology to Apple
However, analysts are hopeful that Samsung will bounce back in the third quarter due to several reasons such as the rising demand for DRAM and the launch of Galaxy Note 9 in the July-September period. Apple is likely to release its new iPhones in the same time period and Samsung will benefit from that too as it supplies OLED screens to Apple.
Choi Do-Yeon, an analyst at Shinhan Investment, stated that even though the second quarter’s earnings were disappointing, Samsung is expected to report an operating profit of $15.40 billion USD in the third quarter of the year because of the improving sales of chips and displays.
Other investment firms are also positive about Samsung’s performance in the next quarter. Korea Investment & Securities and EBEST Investment expect Samsung’s earning to be 16.1 trillion won (approximately $14.53 billion) and 16 trillion won (approximately $14.45 billion) respectively. Daishin Securities is even more hopeful, with a forecast of 17.6 trillion won (approximately $15.98 billion).
Samsung is likely to report a ‘lower than expected operating profit’ in the second quarter because of the lackluster sale of its latest flagship the Galaxy S9 as mentioned above. Various investment firms have lowered their forecast for the quarter. Eugene Investment & Securities lowered it from 15.7 trillion won (approximately $14.18 billion) to 15.2 trillion won (approximately $13.73 billion) and DB Financial Investment lowered its estimate from 15.8 trillion won to 14.9 trillion won. Samsung reported an operating profit of 14.07 trillion won (approximately $12.8 billion) in the April June period in 2017.
Lee Seung-woo, an analyst at Eugene Investment & Securities, said that even though the shipments of Galaxy S9 were stable and impressive in the first quarter, the second quarter sales were not impressive. He expects the first year shipments to be 30 million, which is the lowest number since the release of Galaxy S3 back in 2012.
News Source: The Investor