Samsung Electronics is not expected to show a rebound in sales until the first quarter of 2016.
Samsung Securities Co. said on Dec. 13 that it trimmed Samsung Electronics’ operating profit forecast for the fourth quarter by 300 trillion won (US$253.91 million) to 6.8 trillion won (US$5.76 billion) from the previous 7.1 trillion won (US$6.01 billion) estimate due to sluggish sales in its component business. Hwang Min-sung, an analyst at Samsung Securities, said, “With a slump in the semiconductor and display businesses from falling demand for PCs, Samsung Electronics is likely to show sluggish growth in its component business. Its growth in profits, which remained low in the third quarter last year, will slightly decrease.”
Earlier, Kyobo Securities Co. also forecasted that Samsung Electronics will post 6.7 trillion won (US$5.67 billion) in operating profits in the fourth quarter, seeing a 9.6 percent decrease from the same period last year. Moreover, Dongbu Securities Co. recently expected that Samsung Electronics’ operating profits in the fourth quarter will go down by 11.7 percent to 6.5 trillion won (US$5.5 billion) from the previous quarter. Dongbu Securities analyst Yoo Eui-hyung said, “Since the average selling price (ASP) of semiconductors will decrease more than 10 percent in the fourth quarter and marketing expenses have incurred in its handset (IM) division, the operating profitability ratio will decrease compared to the previous quarter.” Among securities firms that announced the Samsung Electronics’ earnings estimate this month, Dongbu Securities forecasted the lowest figure.
Industry sources also think that Samsung Electronics will keep showing low operating profits in the first quarter next year. As there are no special events in the first quarter, it is considered off-season for the electric and electronics industries. According to market analyst FnGuide, securities companies forecasted that Samsung Electronics’ operating profit will stand at 6.13 trillion won (US$5.19 billion) on average in the first quarter next year, which is lower than 6.79 trillion won (US5.74 billion) in the fourth quarter. This estimated figure is also reflected in its stock price. This month, the price of Samsung Electronics’ shares remains at 1.28 million won (US$1,087), sliding due to the massive sellout by foreign investors. The figure is a 7.16 percent drop from 1.38 million won, its highest closing level in this quarter, on Nov. 2. International investors had gone on a selling spree of Samsung Electronics’ shares for the eighth consecutive trading days from Nov. 2, with the combined sellout worth 667.6 billion won (US$565.04 million).