SAMSUNG ELECT LTD (F) (SSNLF) Is Expected To Bounce Back On New Galaxy Phones And Chips Business


SAMSUNG ELECT LTD (F) (OTCMKTS:SSNLF) investors are betting big on the recovery of the company, having endured one of the worst runs in 2014, amidst stiff competition in the smartphone arena. A rebound this year will probably be triggered by healthy chip sales, as well as the unveiling of new flagship smartphones. The unveiling of the Galaxy S6, with curved-edges, later in the month is seen as one of the events that should kick-start the recovery path.

Recovering Businesses

Analysts are also expecting mid-tier phones to boost sales, the company having suffered six straight quarters of slipping earnings. SAMSUNG ELECT LTD (F) (OTCMKTS:SSNLF)’s semiconductor business is also coming up well as healthy memory chip demand is expected to return profit this year. The Exynos processor is set to power the upcoming Galaxy phones, the company having already added NVidia as a contract manufacturing client.

However, the recovery is expected to be gradual, which means SAMSUNG ELECT LTD (F) (OTCMKTS: SSNLF) won’t be able to generate record profits experienced in 2013. A survey of 41 analysts, by Thompson Reuters, tips first quarter profits to come in at $4.82 billion, down by 38% from levels attained last year. The underlying figures should, however, show some meaningful improvements.

Profit Estimates

Samsung’s whole year profits should come in at $26.5 trillion won, slightly above the $25 trillion won in 2014, according to Reuter’s survey of 51 analysts. SAMSUNG ELECT LTD (F) (OTCMKTS:SSNLF)’s smartphone operations are in full recovery phase, according to one analyst who believes there is an earnings upside possibility of $1.5 billion from the profit forecast of 28.1 trillion won, due to the upcoming flagship devices.

Apple Inc. (NASDAQ:AAPL) poses the biggest threat to Samsung’s recovery path, as strong demand for the iPhone 6 could affect the South Korean juggernaut’s ability to ship more units of the S6 this year. Apple Inc. (NASDAQ:AAPL) could also be a blessing in disguise should the company agree to use SAMSUNG ELECT LTD (F) (OTCMKTS:SSNLF)’s Exynos chips for its upcoming line of iPhones.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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