Samsung Earnings To Go Below Expectations

Samsung Electronics Co. is expecting weaker earnings in the third quarter of the year, as the demands for Samsung’s computer chips and flat panels have decreased.

However the fast selling smartphone’s may help the company in overcoming the slower sales of other wares.  Samsung is currently facing tough competition from Apple Inc. (NASDAQ:AAPL) globally in the smart phone and tablet market, where both the companies are looking forward to obstruct sales of each others’ tablet computers and Smartphone’s.

Apple is seeking to win a temporary sales ban on Samsung’s Galaxy Tab in Australia and the verdict is expected early next week, hearings are also scheduled in Netherlands and U.S. regarding the copyright and patent infringements.

The South Korean based tech giant said it expects third quarter profits to be between a scale of 4.0 trillion won (around $3.4 billion) and 4.4 trillion won. In the third quarter last year, Samsung displayed an operating profit of 4.87 trillion won. Samsung estimates sales amid 40 trillion won ($33.6 billion) and 42 trillion won, compared to 40.25 trillion won earned in the earlier quarter of the year.

Although Samsung did not elaborate on its profits neither did it give a break up of earnings made from each division, according to analysts the liquid-crystal display (LCD) business provided a healthy pull amid weak financial growth in Europe and the U.S.

Samsung’s semi conductor business which has been providing large profits to the company in the past years is expected to have decreased due to a weak demand for Samsung’s memory chips. Kwon Oh-hyun, Samsung’s component division chief, said the company’s chip industry is not expected to stage a recovery this year, on the basis of current worldwide financial uncertainties.

Samsung’s strong increase in sales of non-memory chips and highly developed flat screen displays, largely motivated by quick sales of tablet computers and smart phones will act as a massive support for sales in company’s slow growing business areas, said analysts. The recent slide in the Korean won’s will also act as a benefit in making the company’s products more price competitive initiating profit, they said.

Samsung’s is in the spotlight with its increasing smart phone business and because of its fierce legal fight with Apple Inc. over allegations of tablet and smart phone design and technology infringements. Samsung’s latest move against Apple was to file a lawsuit in Italy and France, seeking a ban on the sale of Apple’s new release iPhone 4S.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.