Samsung has released its earnings guidance for the second quarter and it seems like the South Korean company is headed for yet another lacklustre quarter. Its operating profit is expected to be 6.9 trillion won (about $6.13 billion), a four percent decline from a year ago, and below analysts’ expectations for 7.2 trillion won. The world’s largest smartphone maker by shipments also saw consolidated sales slipping by eight percent to 48 trillion won, below forecasts for 53 trillion won.
Samsung’s shares opened down 0.8 following the guidance, compared with a 0.6 percent gain in the broader market, but pared losses shortly after. They were last seen up 1.3 percent at 1.24 million won.
Samsung attributed its disappointing projections to a scarcity in supplies of raw material, especially for its flagship Galaxy S6. The S6 is the first Samsung flagship to be made of premium materials like metal and glass unlike its predecessors that were predominantly crafted from plastic.
Still, the company is optimistic for the Galaxy S6, stating that it has fixed the supply problems and predicts that the combined sales for the flat-screen and curved screen S6 models will hit a new sales record for the firm in the future.
Last year, Samsung reported its lowest annual profit in three years due to declining smartphone sales and its last two earning report have been disappointing. The company has been facing stiff competition for its smartphones with US rival Apple at the top end and cheaper Chinese smartphone makers such as Xiaomi at the bottom end.
Samsung’s shares opened down 0.8 following the guidance, compared with a 0.6 percent gain in the broader market, but pared losses shortly after. They were last seen up 1.3 percent at 1.24 million won.
