Samsung Electronics Co Ltd fell short of its expected quarterly profit for the second time. Despite the decline in sales, the South Korean tech giant expects earnings to pick up and become stronger in this year's second quarter. The company is betting on its high end smartphones and televisions to deliver growth.
Samsung said the company expects the football World Cup in Brazil to drive television and smartphones sales this quarter. Many fans of the sport spend on premium devices to watch the games in high definition.
According to Reuters, the Korean tech giant needs to revive sales of its premium products to maintain growth. Previously, Samsung earned three fourths its profits from mobile phones. However, the company saw a smartphone market share loss for the first time in four years.
Analysts believe otherwise. Although sports-related demand can offer good earnings for the company, high price tags may curb the sales from expected.
"Their handset shipments guidance suggests there will be low single-digit growth for smartphone shipments for the second quarter, which I think might be below street expectations," explained Maybank Kim Eng analyst Warren Lau.
The company shipped 113 million units between January to March. Samsung expects second quarter shipments to be similar to this. Likewise, release of the Galaxy S5 should add and drive shipments from April to June.
"Samsung is expected to see profits rally in the second quarter and beyond, on the back of improved sales of display panels and home appliances," the company explained in a statement.
"Orders for display panels that are used for premium smartphones and TVs are expected to increase, as new mobile devices are rolled out into the market and as consumers look forward to the upcoming World Cup in Brazil."
Samsung has been the world's largest technology firm based on revenue. However, it posted alarming profits when earnings dropped to 3.3 percent. That is 8.5 trillion won ($8.2 billion) against 8.4 trillion won.
"Samsung continues to face tough competition from Apple at the higher-end of the smartphone market and from Chinese brands like Huawei at the lower-end," Neil Mawston, Strategy Analytics researcher, said.
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