One of the largest handset makers in the world, Samsung is anticipated to post another disappointing profit in the third quarter because of the continued unimpressive performance of the company's mobile division, market analysts say.
According to data compiled by FnGuide, a local financial data provider in Korea, based on estimates by 22 brokerage organizations, the company is expected to generate 6.61 trillion won, or around $5.68 billion, by Sept. 17. This is 6.4 percent down from the forecast a month earlier.
"The operating profit in the IT and mobile division is expected to hover below the previous expectation by 12 percent in the third quarter," researcher at Yuanta Securities Korea, Lee Jae-yoon, states.
In the first quarter of 2015, the company's mobile division logged a profit of 2.74 trillion won, or about $2.34 billion. In the second quarter, however, Samsung generated a profit of 2.76 trillion won, or around $2.36 billion. Meanwhile, the projected profit for the company for the third quarter is 2 trillion won, which translates to about $1.7 billion.
Interestingly, according to Lee Jae-yoon, the mobile shipment of the company is expected to increase in the third quarter and the total number of smartphones sold within the period is projected to rise.
The analyst further says the problem seems to stem from the lack of demand for the company's high-end products, including the Galaxy flagships. Lee Jae-yoon states that Samsung is successful in pulling in customers to its budget phones. However, profits from these devices are said to be much thinner.
Lee Ka-keun, a KB Securities analyst, points out that the display and semiconductor businesses of Samsung seem to be not generating big money for the company, considering the company's stagnant sales growth in China and in the United States.
"While the technology industry is seasonally strong ahead of back-to-school seasons in the United States and big holiday shopping periods ahead of year-end, demand for consumer electronic devices remained weak," the analyst says.
Meanwhile, last month, Huawei became the fourth largest handset maker as its smartphone sales across the globe increased by 39 percent within the first six months of 2015.
