Sat, Jun 08, 2013 - Page 15 News List

Samsung shares plunge on negative smartphone report

MISSING TARGETS:The firm aimed to expand its presence in high-end markets with the S4, but an expert said Q2 sales would be disappointing

AFP and Bloomberg, SEOUL

Samsung Electronics Co shares plunged more than 6 percent yesterday, the biggest single-day drop in nine months, after analysts at JPMorgan forecast slower sales of its new flagship smartphone.

Shares in the world’s largest smartphone maker closed down 6.2 percent at 1,427,000 won.

Traders attributed the sell-off to a research note from JPMorgan analyst JJ Park, who said sales of the South Korean giant’s Galaxy S4 might not be as strong as had been expected.

“Compared to S3, S4 had stronger momentum in the first quarter of launch,” Park wrote.

“But the following quarter’s shipment is expected to be disappointing and its peak-quarter number seems way below our previous estimates,” Park added.

“Our supply chain checks show monthly orders have been cut 20 percent to 30 percent to 7 to 8 million units [from 10 million] starting next month,” he added.

JPMorgan now expects Samsung’s shipments of the S4 to be 60 million this year, compared with a previous estimate of 80 million.

Samsung sold 10 million units of the S4 — launched on April 26 — within 27 days, the company said.

JPMorgan cut its share-price estimate for Samsung by 9.5 percent to 1.9 million won and lowered its this year’s earnings estimates by 9 percent.

Samsung had looked to the S4 to expand its presence in high-end markets in the US and elsewhere, crowding out arch rival Apple Inc’s iPhone.

The S4, featuring a high-definition, five-inch screen and enhanced picture-taking capabilities, comes with a faster chip and is thinner and lighter than its predecessor.

Last month, Samsung unveiled a slimmed down S4 “mini” aimed at the mid-range market.

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