Samsung Estimates Record Profits

Samsung Electronics issued new guidance stating it predicted record operating profit for its third quarter. However, the electronics giant could be facing shareholder pressure to use its cash holdings as smartphone market saturation threatens to slowdown growth in earnings for the company that is based in South Korea.

The biggest mobile handset maker in the world by number of shipments announced on Friday it estimates its operating profits to be between $9.2 billion and $9.6 billion for the quarter ended September 30. During the second quarter, Samsung posted operating profit that set a new record.

The estimate by Samsung represents an increase of 22.8% to 27.7% over operating profit during the same quarter one year ago. However, that is a slowdown from record profits for the second quarter that jumped up 47.5%.

Sales for Samsung as expected to rise by between 11% and 15% over the same three months of last year.

Samsung did not release an estimate for its net profit for the third quarter or provide a reason for its latest guidance announcement.

The financial results for the company are to be released to the public at the end of this month, when breakout figures will be provided for all four of its business divisions – display, chips, consumer electronics and mobile.

Samsung’s stock in Asia was little changed on the day, although the stock prices for Samsung recovered a bit form its low of 2013. Some stock analysts are not predicting a sharp rebound due to marketing costs and the increased sales of low and mid priced handsets that have squeezed margins in the core mobile sector of the company.

Apple and Samsung own a duopoly in the high-end segment of the world’s smartphone market. However, competition has increased with several analysts warning that the smartphone sales for Samsung have shown signs of reaching their peak.



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