Samsung Electronics tips second quarter pickup, smartphone challenge looms

Tue Apr 29, 2014 5:39am EDT
 
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By Se Young Lee

SEOUL (Reuters) - Samsung Electronics Co Ltd on Tuesday said it expected stronger earnings in the second quarter as a pickup in sales of high-end televisions and smartphones spurs growth, after it posted its second straight fall in quarterly profit.

The South Korean tech giant said the football World Cup in Brazil should help boost sales of screens and smartphones in the current quarter, as fans splurge on up-market devices like ultra high-definition (UHD) TVs to watch the action.

A revival of sales of upmarket TVs and smartphones is crucial for Samsung to sustain growth, as its mainstay mobile business, which generated three fourths of its first-quarter profit, reported its first smartphone market share loss in four years.

But while sports-related demand should be positive, analysts say the dearth of UHD-standard content and high prices could limit the upside for sales of premium devices from the football extravaganza.

"Their handset shipments guidance suggests there will be low single-digit growth for smartphone shipments for the second quarter, which I think might be below street expectations," said Maybank Kim Eng analyst Warren Lau.

Samsung said handset shipments in the second quarter should be similar to 113 million seen in the January-March period, though smartphones such as the Galaxy S5 should make up more of the April-June shipments.

"Samsung is expected to see profits rally in the second quarter and beyond, on the back of improved sales of display panels and home appliances," Samsung said in a statement.

"Orders for display panels that are used for premium smartphones and TVs are expected to increase, as new mobile devices are rolled out into the market and as consumers look forward to the upcoming World Cup in Brazil."   Continued...

 
A man uses his mobile phone in front of a giant advertisement promoting Samsung Electronics' new Galaxy S5 smartphone, at an art hall in central Seoul April 15, 2014. REUTERS/Kim Hong-Ji