Samsung Electronics has forecast low operating profit for the second quarter of 2011 as its LCD and semiconductor businesses fail to perform.
The South Korea based consumer electronics posted a preliminary report for the second quarter financial results. Samsung posted an operating profit of 3.7 trillion won or $3.5 billion, which is 26 percent lower than the 5.14 trillion won or $4.83 billion operating profit reported in the same period a year ago.
The company’s sales increased by 2.9 percent to 39 trillion won or $36.6 billion from 37.9 trillion won or $35.6 billion posted last year.
Analysts had expected Samsung to post an operating profit of 4 trillion won or $3.8 billion as it had generated an operating profit of 2.95 trillion won or $2.77 billion in the first quarter of 2011.
“[The forecast] is slightly better than what the market had been expected, as many had been slashing their forecasts recently due to losses from the LCD division," Kim Young-chan from Shinhan Investment Corp. told BBC News.
"It will be again smartphones which will lead earnings recovery in the second half of this year, although competition may get tough again in the third quarter when Apple introduces a new iPhone," said Mr Kim.