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Samsung CFO Admits Publicly that 2nd Quarter Isn't that Good

10. News
Patently Apple has been consistently reporting on the myth that Samsung's S5 is a smash hit in various reports since April. Our most recent report posted last week was titled "Samsung's Galaxy S5 is Confirmed a Dud & May Hurt Financials." That particular report sent one Android fan known as "Evolved" into a spitting tirade. It's on record that that this fan tweeted us with this response: Why fucking post about Samsung on that Apple site? Biased liars. Stupid fucks!" Well, according to the Financial Times today, "Samsung Electronics has turned bearish on its second-quarter performance, with its chief financial officer saying he expects results to be "not that good" as rising competition stifles profit growth at the mobile division." I guess "Evolved" will now have to tweet Samsung's CFO and continue his rant.


The downbeat comments made on Wednesday by Lee Sang-hoon, made to local media reporters on the way to a meeting and later confirmed by Samsung, stoked concerns that earnings may be worse than market consensus.


Shares in Samsung closed down 1.9 per cent in Seoul, against a 0.6 per cent decline for the benchmark Kospi Composite index. The stock has fallen 3.6 per cent so far this year amid investor concerns about the company's weakening growth momentum.


CW Chung, an analyst at Nomura stated that "There must have been some adverse effects from the stronger won and its smartphones and tablets don't seem to be selling as well as Samsung had hoped."


Samsung launched its flagship Galaxy S5 smartphone in April along with up to $600 in freebies marking the first time that it had offered incentives for its best-selling series of devices. But the company is expected to face intensifying competition in the premium market with Apple set to launch a larger-screen iPhone in the next few months.


Samsung plans to give guidance for the second quarter between July 7 and July 9.


IBK Securities estimates Samsung's smartphone shipments fell to 78m units, from 87.5m units in the first quarter. Worryingly, analysts reckon the weakening performance of the mobile unit could have a knock-on effect on other businesses given the company's vertically integrated structure.


In the end, we still don't know for sure where Samsung's financials will prove to be poor. Most analysts point to falling smartphone sales, but we won't know that for sure until Samsung spells it all out in the coming weeks ahead. For more on this see the Financial Times report.


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A Tweet to Patently Apple from Evolved June 17, 2014



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