Samsung shares fall after JPMorgan cuts profit outlook

Samsung Galaxy S4 Samsung released its latest flagship product the Galaxy S4 last month

Related Stories

Shares in Samsung Electronics, the world's biggest smartphone maker, fell the most in nine months after JPMorgan Chase cut its profit estimates.

Samsung shares fell as much as 5.5% in early trade in Seoul to a four-month low of 1,438,000 South Korean won.

JPMorgan said weak demand for Samsung's flagship phone, the Galaxy S4, from Europe was likely to impact earnings.

It said it now expects S4 shipments this year to be 20 to 30% lower than its previous forecast.

It said the firm was expected to ship 7 to 8 million units per month from July. Last month, Samsung announced that it had sold 10 million S4 units within a month of the phone's launch.

JPMorgan analysts were quoted as saying by Bloomberg news agency that the S4's "peak-quarter number seems way below our previous estimates".

JPMorgan lowered its 2013 earnings forecast for Samsung by 9%.

'Lagging sales'

Profit warnings from analysts of other South Korea-based firms this week also dented investor morale.

"It's a general consensus that the profitability of Samsung's mobile business will weaken," Young Park from Woori Securities said in a note to clients.

Samsung has been shifting its focus to cheaper smartphones as it compete with Chinese manufacturers.

However, analysts said that such moves would put pressure on profit margins and slow growth momentum for its high-end models including the Galaxy S4.

"Sales of high-end handsets are lagging behind expectations, while low-to mid-end handsets are selling briskly worldwide," said Kim Young-chan from Shinhan Investment Corp.

More on This Story

Related Stories

More Business stories

RSS

Features & Analysis

  • French luxury Tea House, Mariage Freres display of tea pots Tea for tu

    France falls back in love with tea - but don't expect a British cuppa


  • Woman in swimming pool Green stuff

    The element that makes a familiar smell when mixed with urine


  • People take part in an egg-cracking contest in the village of Mokrin, 120km (75 miles) north of Belgrade, Serbia on 20 April 2014In pictures

    Images from around the world as Christians mark Easter Sunday


  • Female model's bottom in leopard skin trousers as she walks up the catwalkBum deal

    Why budget buttock ops can be bad for your health


From BBC Capital

Programmes

  • An aerial shot shows the Olympic Stadium, which is closed for repair works on its roof, in Rio de Janeiro March 28, 2014.Extra Time Watch

    Will Rio be ready in time to host the Olympics in 2016? The IOC president gives his verdict

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.