The biggest smartphone manufacturer in the world – Samsung Electronics Co. made a statement, posting its net profit for the first quarter of the current financial year that managed to surpass the analysts forecasts due to increasing demand for the Galaxy series devices and amid boosted TV sales.
The smartphone profit margin remained flat at 19.8% over the three months ended March 31st from a year earlier. According to Samsung Electronics Co.s statement, the first-quarter net income excluding minority interests increased by 7.3% and reached 7.48 trillion won (7.2 billion dollars), beating the median analysts estimate of 6.75 trillion won in a Bloomberg survey of 19 experts. The companys sales for the period increased by 1.5% to 53.7 trillion won.
Samsung Electrinics Co. said in its statement that its operating profit decreased by 3.3% to 8.49 trillion won over the fiscal years first quarter.
One of the analysts, who work for HMC Investment Securities – Mr. Greg Roh commented Samsungs results in an interview for the Wall Street Journal: “Despite increasing sales volumes, a decline in profits seem inevitable due to falling prices and intensifying competition.”
The company kept its optimistic outlook and shared its forecast for the rest of the financial 2014. Samsung forecast increasing profits over the upcoming quarters due to memory chips and premium TVs increasing demand. As reported by Bloomberg, Lee Seung Woo, who works as an analysts at IBK Securities Co. said: “The chip and display businesses will likely lead the earnings improvement going forward. Earnings look better than expected.”
Currently, the company has been mainly focused on its new Galaxy S5 release and has invested a lot of efforts in promoting it in order to increase customers demand. That is one of the reasons why Samsung expects the new S5 devices sales to beat the ones of its predecessor Galaxy S4. About 63.5 million S4 units were shipped until the end of February 2014.
Samsung Electronics Co. Ltd lost 0.79% to trade at 1 388 000 South Korean wons per share by 6:56 GMT, marking a one year change of -6.28%. According to the Financial Times, the 41 analysts offering 12 month price targets for Samsung Electronics Co. Ltd have a median target of 1,750,000, with a high estimate of 2,000,000 and a low estimate of 1,150,000. The median estimate represents a 25.09% increase from the last price of 1,399,000.
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