Samsung leaded by sluggish sales of the Galaxy S6 – Le Point

Samsung Electronics announced Tuesday expect a decline in results in the second quarter due to production delays and less successful Galaxy S6, rival of the iPhone which cases worldwide. The South Korean group expects an operating profit of 6,900 billion won (5.5 billion euros) in the period April-June, down 4.03% year on year, the seventh straight decline in quarterly results.

Analysts polled by Bloomberg expected this quarter an operating profit of 7,200 million, unchanged from the corresponding period of 2014. It is, however, an increase of 15% on the first quarter of the current year. Revenues should stand at 48,000 billion won, down more than 8% year on year but up nearly 2% from the previous quarter. Analysts had expected 53 000 million.

“The S6 Galaxy sales were much weaker than expected,” both because they struggle to win against the iPhone and because Galaxy Edge S6, equipped with a curved screen, experiencing production delays, notes Greg Roh at HMC Investment Securities Co. “The Galaxy S6 quite early market, but Samsung has underestimated the market demand for Edge model, “confirmed the KB Investment & amp analysts; Securities Co. in a note of July 3, cited by Bloomberg. In an attempt to redress the balance, Samsung have launched the production of curved screens in a third plant with two months in advance, allowing it to double monthly production volumes to 5 million.

Bet Lost

After considerable blows in 2014 amid slowing demand and saturated market, South Korea placed its hopes on the latest version of its flagship range. The Galaxy S6 and S6 Edge, launched in April, had been greeted by rave reviews and Samsung was betting on a rise in sales in the second quarter when sales were “booming”. Bet lost, so even if the South Korean has probably limited the damage, as in previous quarters, thanks to sales of its memory chips constantly growing sector for which it is investing billions of euros to keep its advantage.

Samsung had however recovered in the first quarter its crown as the world leader of smartphones sold to Apple in the fourth quarter 2014, according to figures from Gartner. But Apple has since strengthened its presence in China where it became the first vendor. Samsung is also struggling in the entry-level or mid-range phones face the Chinese manufacturers like Lenovo and Xiaomi. Samsung Securities Co. brokerage in June lowered its sales forecast for Galaxy S6 to 45 million units in 2015, against 50 million previously estimated. According to his calculations, Samsung will sell a total of 78 million phones this year, against 85 million in 2014. At the Seoul Stock Exchange, the Samsung basis, down 7.2% from the beginning of the year, took 1, 54%, to 1.25 million won, after the publication of the profit warning.