 "Samsung tips Q2 pickup, smartphone challenge looms")
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.
Shares of Samsung Electronics, worth $220 billion, were down 1.7 per cent at midday, worse than a 0.3 per cent fall in the benchmark Korea Composite Stock Price Index.
For January-March, the world’s biggest technology firm by revenue said operating profit fell 3.3 per cent from a year earlier to 8.5 trillion won ($8.2 billion), versus guidance of 8.4 trillion won.
The world's biggest smartphone maker is now banking on its premium Galaxy S5 handset, launched earlier this month, to outsell its predecessor and widen profit margins, a senior executive told Reuters earlier.
The end of the heyday of smartphone innovation has left Samsung - which posted five straight record quarterly profits until the first quarter of 2013 - facing its first annual profit fall in three years, according to analysts polled by Reuters.
The firm's broad range of low-end phones is being caught by the improving quality of Chinese-made offerings, while the large-screen advantage of its top-end phones is expected to come under threat from Apple's next iPhone.
"Samsung continues to face tough competition from Apple at the higher-end of the smartphone market and from Chinese brands like Huawei at the lower-end," Neil Mawston at researcher Strategy Analytics said.
Any further decline in profitability could increase shareholder pressure on the company to produce a new growth engine or lift payouts, though the company offered few details about how it will use the 61.5 trillion won worth of cash and other equivalents held at the end of the first quarter.
"The question is what the company can offer to answer questions about where future growth will come from," said Park Jung-hoon, a fund manager at HDC Asset Management.
In the chip business, profits jumped 82 percent from a year earlier to 1.95 trillion won, in line with similarly strong results from rivals such as SK Hynix Inc thanks to solid demand from PC makers and tight supply.
($1 = 1035.1500 Korean Won)
Shares of Samsung Electronics, worth $220 billion, were down 1.7 per cent at midday, worse than a 0.3 per cent fall in the benchmark Korea Composite Stock Price Index.
For January-March, the world’s biggest technology firm by revenue said operating profit fell 3.3 per cent from a year earlier to 8.5 trillion won ($8.2 billion), versus guidance of 8.4 trillion won.
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Profit in the mobile division was 6.43 trillion won, down 1.2 per cent from 6.51 trillion won a year earlier.
The world's biggest smartphone maker is now banking on its premium Galaxy S5 handset, launched earlier this month, to outsell its predecessor and widen profit margins, a senior executive told Reuters earlier.
The end of the heyday of smartphone innovation has left Samsung - which posted five straight record quarterly profits until the first quarter of 2013 - facing its first annual profit fall in three years, according to analysts polled by Reuters.
The firm's broad range of low-end phones is being caught by the improving quality of Chinese-made offerings, while the large-screen advantage of its top-end phones is expected to come under threat from Apple's next iPhone.
"Samsung continues to face tough competition from Apple at the higher-end of the smartphone market and from Chinese brands like Huawei at the lower-end," Neil Mawston at researcher Strategy Analytics said.
Any further decline in profitability could increase shareholder pressure on the company to produce a new growth engine or lift payouts, though the company offered few details about how it will use the 61.5 trillion won worth of cash and other equivalents held at the end of the first quarter.
"The question is what the company can offer to answer questions about where future growth will come from," said Park Jung-hoon, a fund manager at HDC Asset Management.
In the chip business, profits jumped 82 percent from a year earlier to 1.95 trillion won, in line with similarly strong results from rivals such as SK Hynix Inc thanks to solid demand from PC makers and tight supply.
($1 = 1035.1500 Korean Won)