Samsung Estimated Q1 Revenue, Profit Figures Show Continuing Struggles

By Todd R. Weiss  |  Posted 2015-04-07 Print this article Print
Samsung, Q1 earnings, smartphones

In its estimated Q1 financial filing, Samsung reported operating income that was lower than the same period a year ago, but higher than the expected average of 36 financial analysts.

Samsung continues to battle its way back from several tough financial quarters as its latest Q1 estimates show lower operating income and lower sales compared with one year ago.

The company released the estimated Q1 figures on April 7 as a preview before its full Q1 earnings report later this month.

Samsung's operating income for the quarter fell 31 percent to about $5.4 billion, (5.9 trillion South Korean won) in the first quarter ending March 31, which was higher than the 5.5 trillion won that was expected by 36 financial analysts, according to an April 6 report by Bloomberg. At the same time, Samsung's sales are expected to fall some 12 percent in the quarter compared with one year ago.

The company was able to beat the analysts' estimates when "rising demand for memory chips and displays more than offset a slump in smartphones," according to the article.

Samsung has been hard hit the last several quarters by lower sales of its mobile phones, which have been giving way to cheaper phones from Chinese handset makers, and from stiffer competition from Apple and its latest iPhone 6 smartphones and from other competitors, according to earlier eWEEK reports. Much of the sales slump likely was due to consumers who were waiting to see the then-new iPhones and Samsung's own replacement for its then-flagship Galaxy S5 phone.

The company is now hoping for a big financial turnaround in the near future as its all-new, redesigned and flashier flagship smartphones, the Galaxy S6 and the Galaxy S6 Edge, go on sale to consumers in 20 countries, including the United States, on April 10 after almost two months of intense build-up in the marketplace.

The new Galaxy S6 and Galaxy S6 Edge smartphones have been attracting so much consumer interest and so many preorders that the company is already boosting its production targets for the new devices. Instead of producing 7 million Galaxy S6 and S6 Edge devices in April, Samsung has placed orders for an extra 1 million units, boosting its order to 8 million smartphones for the month, according to earlier reports. Samsung had previously said it had ordered 5 million of the smartphones for March, bringing the total production for the two months to 13 million phones.

The new Galaxy S6 smartphones are quite impressive, giving some credence to Samsung's hopes that they will hit the mark when it comes to taking on the iPhone 6 and the iPhone 6 Plus around the world.

The improvements in the new S6 smartphones over the previous Galaxy S5 model are many and range from a chassis made of aircraft-grade aluminum to a higher-resolution 5.1-inch, quad HD Super AMOLED (Super active-matrix organic LED) display, Samsung's latest eight-core 64-bit Exynos 7 processors, and new LPDDR4 flash RAM and non-expandable UFS 2.0 flash storage that will be available in three capacities—32GB, 64GB and 128GB.

A successful launch for the next Galaxy is very important for Samsung as it continues to battle its way out of its slump. Samsung continues to be in the midst of plans to pare back its model line and cut production costs to better compete, according to earlier eWEEK reports.



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