SEOUL (Reuters) - South Korean tech giant Samsung Electronics Co Ltd (005930.KS) estimated on Friday earnings would grow at the slowest pace in more than a year in the second quarter, as analysts said weak smartphone sales likely offset record high chip earnings.
The world’s biggest maker of memory chips, smartphones and TVs said April-June operating profit would grow 5.2 percent to 14.8 trillion Korean won ($13.2 billion), just missing an average estimate of 14.9 trillion won from 18 analysts polled by Thomson Reuters.
While the chip business would post its seventh consecutive record quarterly profit, analysts say, smartphone earnings growth was weak, fueling concerns the mobile business is running out of ideas to underpin sales of its premium Galaxy devices.
“It is going to be tough. The smartphone market is not growing anymore but the competition is intensifying,” said Lee Won-sik, an analyst at Shinyoung Securities.
Revenue likely lost 4.9 percent from a year earlier to 58 trillion won, Samsung said, versus analysts’ average forecast of 59.7 trillion won. The firm did not elaborate and will release detailed earnings in late July.
Samsung shares were down 1 percent in early Friday trade, compared with a 0.2 percent rise for the broader market .KS11. The stock has slid about 9 percent this year on concerns over slowing profit growth and a lack of technological innovation to drive future smartphone sales.
Competition from cheaper Chinese brands like Xiaomi Corp (1810.HK) and Huawei have seen Samsung lose market share in China and India, the world’s top smartphone markets.
Instead, the firm’s profits are being driven by
