Samsung has impressed analysts and investors with its latest guidance for operating profit in the third-quarter, saying it expects to have earned between 9.9 trillion won and 10.3 trillion won ($9.2 billion and $9.6 billion). That’s up from 8.06 trillion won last year and marks another record performance in operating profit. It had posted an operating profit of $7 billion in the second quarter of 2013.
Samsung derives the majority of its earnings from making and shipping smartphones, and one of its main challenges has been in competing against cheaper smartphone vendors in China.
Yet the faltering profits of HTC, a leading smartphone maker from Taiwan, will probably give Samsung some more breathing room. HTC also revealed today that it had lost 2.97 billion Taiwan dollars (101 million) in the third quarter, marking its first-ever quarterly loss.
Bernstein Research analyst Mark Newman said that till now, investors have been skeptical of Samsung’s ability to maintain its profit growth because the business for selling smartphones has become increasingly saturated, particularly in markets like the U.S. and Western Europe.
“These fears were proven wrong today,” Newman said. “We continue to believe that Samsung’s diversity of profit streams plus strength and scale in all price tiers of smartphones helps them to continue to grow profits.”
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