Samsung Projects a 30-Percent Profit Decline, but S6 May Help

Samsung projects 30-percent dip in profits, may recover with Galaxy S6 release

Samsung Galaxy S6 Edge top angle — Giuliano Correia/Digital Trends

In spite of recent signs of a revival, Samsung may experience more pain before recovering from a string of quarterly losses. Samsung is predicting a 30-percent drop in profits for the first quarter of 2015, continuing a trend that has been in place since it introduced the Galaxy S5.

In its earnings guidance, the company estimated operating profit at 5.9 trillion won ($5.45 million) from January to March. The figure represents a 30.5-percent drop from the $8.49 trillion that the firm generated during the same period last year. This continues Samsung’s decline from profitability. During the fourth quarter of last year, the company posted a 36-percent decline from the same period in 2013. The company also projected sales of 47 trillion won ($43.4 million) for the first quarter, which amounts to a 10.6-percent decline from last year.

While the numbers paint a bleak outlook, this may be just a temporary dip before ascension. The company has recently exhibited signs of a turnaround. To put the numbers in perspective, it must be mentioned that Samsung did not have major smartphone releases during the first quarter of 2015. It is expected that the company would post stronger numbers for the second quarter of this year, due to the release of its upcoming high-end phones, the Galaxy S6 and Galaxy S6 Edge.

The Galaxy S6 has so far generated a lot of interest, primarily due to what it represents — a design reboot that is meant to differentiate Samsung phones from other Android devices. The focus on design has translated to solid advanced sales. The company has yet to release official figures, but a report from Korea Times said that the company already had 20 million preorders for the device. Before the story came out, J.K. Shin, the head of Samsung’s mobile unit, said that preorders were “really huge.”

Aside from its new flagship device, the company may also source its turnaround from its chips manufacturing deal with Apple and a few new low-end phones that may compete against Chinese competitors like Xiaomi and Huawei.

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