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Samsung Profits Crash Again Despite the Press Trying to Positively Spin this News

1AF 55 cover - another plunge

Wow, do the press love Samsung or what? Samsung announced today that their first quarter will come in with profits down again at 31 percent but because of deeply revised forecasts, the press is seeing this as a positive turnaround story. Say what? In January we reported on Samsung's fourth quarter profits plunging 60 percent or more. It was so bad Samsung cut Q1 expectations severely and yet they couldn't even reach those numbers. So a 31 percent drop is what it is, disastrous, no matter how you try to spin this. Samsung's losses are simply continuing as they hope and pray that their new Galaxy S6 will be able to truly turn their profit picture around in the quarters ahead.

 

According to the IDG report, "Operating profit for the quarter, which included the key year-end sales period, will be around 5.9 trillion won (US$5.4 billion), a drop of just over 30 percent versus the last three months of 2013, while revenue is expected to be 47 trillion won, down 12 percent, the company said in its earnings guidance. It will report its full quarterly results at the end of the month."

 

Samsung executives had stoked anticipation for the first-quarter results with bullish public statements. "We're done with recovery," Kim Hyun-seok, head of Samsung's television business, told local reporters last week.

 

"Nevertheless, revenue was lower than expected," reports the Financial Times, "in part a reflection of weaker household electronics revenue in Europe and some emerging markets, whose currencies have fallen significantly in recent months." These are excuses and we'll likely see how Apple overcame such so-called problems later this month.

 

A Barron's brief this morning noted that shares of Samsung Electronics were down fractionally in morning Seoul trading after the company's revenue outlook missed consensus.

 

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