Samsung profit guidance way better than expected, company on track to becoming world’s biggest smartphone maker

Samsung profit guidance way better than expected, company on track to becoming world’s biggest sma
Samsung has released its quarterly profit estimate and it’s better than even most optimistic analysts thought. The Korean company sees its operating profits at some $3.5 billion (4.2 trillion won) against an average of $2.85 billion (3.4 trillion won) suggested by analysts. That’s a 12% increase on the quarter, but a 14% decline when looked on a year-on-year basis.

“Samsung’s estimates are far better than expected. Its telecommunications business is seen very positive as shipments of smartphones and other high-end handsets expanded,” Park Jong-min, a fund manager at ING Investment Management, said.

Samsung is projected to surpass Apple as the biggest smartphone maker in the world this very quarter. Last trimester, smartphone sales at Samsung stood at around 19 million, just a million short of Apple, and this quarter a dramatic increase to 28 million is said to leave Cupertino trailing. Everyone expected Samsung’s phone business to drive profits up, but the company’s estimate shows that it has surpassed all expectations.

"The Galaxy S II probably played a key role in boosting the company's earnings and it will continue to do so pretty much unchallenged, until Apple unveils a better new version of iPhone," Kyung Woo-hyun, a fund manager at Daishin Asset Management, said.

Previously, the company has mostly relied on its memory chips for profits, but lately as chip prices continue their decline, handsets have taken over as the company’s brightest spot. The Samsung Galaxy S II will be key to continuing that success as it faces the iPhone 4S stateside. Right after the somewhat underwhelming Apple release, Samsung released a comparison table showing that technically its S II is thinner and more powerful than the iPhone 4S.

The Koreans are also said to have the biggest competitor to the iPad in the form of the Samsung Galaxy Tab series. 

source: Reuters

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