Samsung Profits to Drop on Slow Sales of Flagship Phone

Samsung's operating profit is expected to drop in the second quarter of this year due to sluggish sales of the Galaxy S9 flagship smartphone.

The tech giant has enjoyed growing operating profit for the last six consecutive quarters thanks to a boom in the semiconductor market.

DB Financial Investment, eBest Investment Securities, Eugene Investment and Securities and KTB Investment and Securities on Monday lowered their forecast for Samsung's operating profit to around W15 trillion for the second quarter (US$1=W1,076). In the first quarter of this year it was W15.64 trillion.

Securities firms earlier said the Galaxy S9 was selling well even though it is not very different from its predecessor. Samsung released the phone in March, a month earlier than usual, which produced good initial sales, but then they levelled off.

"The S9 is expected to hit the lowest sales of any flagship model since the S3 with just 30 million units this year," said Lee Seung-woo at Eugene Investment and Securities.

Slow sales of TVs ahead of major sporting events like the World Cup and the Asian Games, which normally stoke them, also affected the forecast. Securities firms expected Samsung will post an operating profit of W500 billion in the consumer electronics business in the second quarter, just half of the second quarter of 2016 before the Rio Olympics.

But growth in semiconductor sales is expected to continue throughout this year due to rising prices of DRAM.