Weak profit expected in Q3 as Samsung’s phone business remains under pressure

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Last updated: September 21st, 2015 at 12:52 UTC+02:00

Market analysts predict that Samsung Electronics will bring in under 7 trillion won ($5.9 billion) in Q3 operating profit, it will be yet another weak quarter for the company as its smartphone business remain under pressure across all segments of the market. 22 domestic brokerages in Korea have formed consensus over Samsung’s third quarter operating profit which they expect will come in at 6.61 trillion won or ($5.68 billion). The brokerages have reduced this figure by 6.4% from the previous month when it was estimated that Samsung would bring in close to 7.06 trillion won this quarter.

Even though Samsung is expected to reap 50.17 trillion won ($42.3 billion) in quarterly sales it may only post a net profit of 5.4 trillion won ($4.3 billion). If these numbers are accurate then Samsung would post more revenue than Q2 2015 but net profits will have declined over the same period despite the fact that the Galaxy Note 5 and the Galaxy S6 edge+ were released in this quarter. Many analysts are of the view that this is due to dwindling demand for high-end smartphones which tend to give higher margins which is why sales of Samsung’s flagship handsets aren’t doing much to turn the company’s fortunes around. On the other hand Samsung is coming increasingly under pressure from local vendors in emerging markets as well as Chinese OEMs in the low-end and mid-range segments of the market. It was expected that 2015 will be a tough year for Samsung and it’s certainly proving to be so.

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