Samsung sees higher Q2 handset earnings

Samsung sees higher Q2 handset earnings

Samsung sees higher Q2 handset earnings

 Samsung Electronics Co expects sales of its new Galaxy S III, launched at the end of last month as a main rival to Apple’s iPhone, to top 10 million during July, making it the South Korean group’s fastest selling smartphone.

It also predicted that earnings from its handset division would be higher in the current second quarter than in January-March, countering market concerns that tight supplies of the new Galaxy model and the weak global economy would pressure earnings at Asia’s most valuable technology firm.

Shares in Samsung dropped 4.2 per cent on Monday to a four-and-a-half month low, after more brokers cut their quarterly profit outlook, citing concerns over its chip and telecoms businesses.

“The overall market condition was challenging due to euro zone issues and tight supply of components... but our second quarter results will be better than the first quarter,” Samsung Head (Mobile Division) JK Shin said.


Profit from Samsung’s mobile division nearly trebled in January-March to $3.6 billion, accounting for 73 per cent of group operating profit.

“Looking beyond its current weakness in the chip sector, it appears investors are also worried that global macroeconomic woes may eat into handset sales in the second half,” said Han Seung-hoon, an analyst at Korea Investment & Securities.

Samsung kicked off global sales of its Galaxy S III on May 29, but shipments have been affected by the tight supply of parts such as the handset casing for the pebble-blue model.

In the United States, where sales were launched last week, major carriers including Sprint Nextel Corp, T-Mobile and AT&T have not been able to offer the Galaxy with 32 gigabytes of memory, partly due to tight supply.

“Due to overwhelming demand for the Galaxy S III worldwide, Samsung has informed us that they will not be able to deliver enough inventory of Galaxy S III for Sprint to begin selling the device on June 21. We are working closely with Samsung on a delivery schedule to support our launch,” Sprint said on its website. It has yet to start shipping pre-orders for the 32 GB version.

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