Samsung Electronics has announced its earnings guidance for the 2015 first quarter, revealing it expects around a 30 per cent year-on-year drop in operating profit.Samsung expects operating profit for the quarter of approximately 5.9 trillion won (around $7.05 billion), down from 8.49 trillion won in last year’s corresponding quarter. This compares to an average of 5.5 trillion won of 36 analyst estimates compiled by Bloomberg.
Expected sales of approximately 47 trillion won, meanwhile, are down from 53.68 trillion won recorded in the 2014 corresponding quarter.
In recent times, Samsung has suffered a widely documented decline in smartphone market share, with competition coming at both the premium and budget ends of the market.
Technology research firm Gartner last month found that Apple overtook Samsung as the number one global smartphone vendor in the 2014 fourth quarter.
“Samsung’s performance in the smartphone market deteriorated further in the fourth quarter of 2014, when it lost nearly 10 percentage points in market share,” Anshul Gupta, Gartner principal research analyst, commented of Samsung’s decline.
“Samsung continues to struggle to control its falling smartphone share, which was at its highest in the third quarter of 2013. This downward trend shows that Samsung’s share of profitable premium smartphone users has come under significant pressure.”
Samsung will be looking to the upcoming release of the Galaxy S6 and Galaxy S6 edge smartphones to deliver a boost in the second quarter.
“Robust sales of memory chips for mobile devices and servers contributed to the stronger-than-expected profit,” Bloomberg reported Greg Roh, a Seoul-based analyst at HMC Investment Securities Co, as stating of Samsung’s first quarter.
“Tighter marketing spending at mobile also contributed to the higher result and second quarter results will be a lot higher, largely helped by S6 smartphones.”
