Samsung forecasts a soared Q1 profit due to S7 sales boost

Samsung forecasts a soared Q1 profit due to S7 sales boost

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THURSDAY: Smartphone manufacturer, Samsung Electronics Co. predicts a better-than-expected performance during its first Q, assuming that sales of its latest launch, Galaxy S7 could have given it another boost.

As per South Korean technology giant itself, it probably logged an operation profit worth $5.7 billion following March Q ending, with an increment of 10.4% from a year ago. Similarly, the revenue rate as per forecast has gained 4% to approx. 49 trillion won from 47.1 trillion won.

Samsung shipped as many as 10 million units of the two Galaxy S7 models in the first Q, which equals approx. 30% to 40% bullish than what market had previously predicted.

Currently, the analysts have invested their greater hopes in shipments of Samsung’s Galaxy S7 and Galaxy S7 Edge during its first Q – attributing figures to an earlier rollout along with introducing an aggressive upgrade program within selective markets.

However, still way too far – with this hike, smartphone manufacturer’s total operating profit still remains 22% lower from that of year 2014’s initial months. On the other hand, it won’t be inappropriate to believe that Samsung’s business is recovering after two years of sore; its margins had dipped as low as 7% when cheap Chinese brands had bombarded the market platform.

“It might be a bit early to get too excited over the estimated Galaxy S7 shipment figures, as we have yet to see how many will actually reach end customers. But the launch seems to have been well timed.” – HMC Investment & Securities’ analyst, Greg Roh

INSIGHT: Samsung’s main competitors: Apple Inc. and LG Electronics Co. introduced upgraded version of 4-inch screen iPhone, and latest flagship phone, G5, respectively – in late March.

UPDATE: Samsung Electronics Co. has also been running upgrade programs that allow users to switch to a new Samsung phone; [either] after half of the device’s retail price has been paid off or after having used the Galaxy S7 phone for at least one year under the policy agreement.

Actual estimates are likely to be yielded by end of April 2016.

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I cover technology, utilities and biotechnology for Markets Morning, and I help out occasionally with other industry sectors. I've written about investment and personal finance topics for more than 20 years from a lowly copywriter to editor-in-chief, so I've done a little bit of everything. For what it's worth, I have a BA from Duke University and an MBA from Rollins College. I'm married with one daughter, and that's worth more than everything else put together.

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