Samsung’s sales and profit likely to miss Q2 forecasts

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Manufacturer says both are likely to fall, with higher than expected demand for the S6 edge causing supply issues

Samsung is expected to reveal weaker than expected Q2 financial results, with both sales and profits falling.

This is according to an earnings guidance revealed this morning by the manufacturer for the three months ending June 30.

It is expecting sales to drop four per cent from a year ago to 6.9tn won (£3.9 billion), lower than forecasts of 7.2tn won. However, this would still be Samsung’s highest quarterly profit since the same period last year. Sales are also likely to fall eight per cent to 48tn won, below expectations of 53tn won.

A full breakdown of the Q2 financial results will be released on July 27.

Radio Free Mobile founder Richard Windsor claimed part of the weakness in sales is due to the fact that supply of the Galaxy S6 versions was “completely at odds with demand”.

Samsung had predicted that the regular S6 would outsell the S6 edge by 4:1 but that demand has roughly been 1:1, meaning the manufacturer has struggled to cope with demand for the latter.

“Part of the weakness in revenue is due to the fact that supply of the Galaxy S6 versions were completely at odds with demand, The S6 edge is meaningfully more expensive than the S6 and given that previous edge devices have not sold well, Samsung was rational in its expectation that the regular S6 would outsell the edge by 4 to 1.

“Unfortunately this was not the case as demand has been roughly 1 to 1, leaving a shortage of the S6 edge and inventories of of the regular S6. This is a common occurrence in the handset market where demand is notoriously difficult to predict and hence this is no fault of Samsung’s management.

“The net result is that overall shipments of the S6 have not been as good as hoped, causing the revenue miss reported.”

 

 

 

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