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Are Samsung's Upbeat Expected Earnings Really Due to Galaxy S7 Sales?



A week ago we posted a report titled "Samsung's Galaxy S7 is Moving Faster than Expected because of Massive Giveaways, Plain and Simple." Samsung pulled out all the stops to move volume for the Galaxy S7 smartphone. The major US carriers all ran special 2 for 1 deals and the result is that it moved enough volume to push Samsung to profitability, according to a new Korean report published today.


Global smartphone giant Samsung Electronics Co. is anticipated to post better-than-expected earnings for the first quarter following the better-than-expected performance of the Galaxy S7 series, industry analysts forecast Wednesday.


However, much of this news at present is really hype. Industry watchers are expecting the first-quarter operating profit of the tech giant to reach 6 trillion won (US$5.14 billion), and admit that it's simply in line with 5.98 trillion won posted a year earlier. So where are the better-than-expected profits due to Galaxy S7 sales? Considering that their TV sales were noted as being better than expected, how much of 0.02 trillion won gain over last year really came from Galaxy S7 sales7? Sounds like pure hyperbole to me.


The report further noted that some of their gains are really from "Samsung enjoying foreign-exchange benefits especially in semiconductor and display segments." When taking that into consideration, where is this great profit's gain?


The report lastly hinted that Galaxy S7 sales are a month ahead of schedule, but in context with a massive 2 for 1 sale, it's not really value that's driven the boost, but rather volume; Samsung's famous marketing shell game.


Samsung officially reports earnings guidance on April 7 – so let's wait until then to hear about any official profits at that time.


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