Samsung shares take a dive again on slowing growth, $6.5 billion in value erased
Shares of Samsung electronics started tumbling yet again the second it announced a second quarter guidance that fell short of analysts forecasts. Investors punished the Korean giant by erasing another $6.5 billion of its market value, sending the stock down 3.9% during trading.
This is in addition to the $12 billion it already lost, and to the nine-month low reached when word spread out that the Galaxy S4 orders are falling short of estimates.
Since analysts' models are geared towards the future, each sign of earnings growth slowdown, and Samsung projected Q2 growth to be 48% year-on-year, compared to 61% for Q1, is considered a red flag. The same thing happened with Apple last September, sending the stock down 40% and erasing many billions of market cap from the company.
Not that anyone would sniff at the projected more than $8 billion profit that Samsung is about to announce July 26th, it's just that the high-end market is maturing, and the margins won't be as high anymore, though that is likely to affect all other players, too.