Samsung Q1 2015 results expected to show signs of recovery, due next week

Samsung didn’t have the best 2014, at least from a financial point of view. The company saw a sharp decline in revenues as its smartphone shipments and market shares took a dive from their previous yearly highs. However, this year could mark a revival for Samsung, with many analysts expecting the company’s first financial results this year will be positive.

The reason for the change in outlook comes almost entirely as a result of the Galaxy S6 and S6 Edge smartphone launches, with sales expected end up somewhere around the 45-50 million mark this year. BNP Paribas analyst Peter Yu expects Samsung to ship 44 million Galaxy S6 phones this year, compared with an estimated 38 million Galaxy S5’s last year. The Galaxy S4 was Samsung’s previous best seller, which sold around 45 million units in its first year

“The lead that Samsung makes with the Galaxy S6 and S6 Edge is likely to continue across several quarters. So we project that Samsung will sell more than 50 million units of the Galaxy S6 and S6 Edge combined this year,” -Counterpoint

Samsung had seen its share price slump to a three year low back in late October 2014, following a decline in sales, but has since seen its price rebound to a 21 month high in March. Investors believe that the two phones will sell well after a resoundingly positive reception by the industry, which should in turn provide a much needed boost to the company’s profit level.

That said, any recovery is expected to be gradual rather than sudden. It will take successive positive quarters before talk can begin about returning to the record profits generated in 2013. A Thomson Reuters I/B/E/S survey of 41 analysts forecasts a median first-quarter operating profit at around 5.3 trillion won ($4.82 billion), which is still 38 percent lower than the year before.

“This is a year of recovery for Samsung,” – Park Sung-jae, LS Asset Management

Of course, this figure will be released before the Galaxy S6 has had time to rollout out fully across the world, so we might expect stronger revenue figures in the second and third quarters of the year. The same survey of analysts expects profits to reach around 26.5 trillion won in 2015, slightly up from 25 trillion won in 2014. This would halt the downward trend started last year and would set Samsung up back on the path to growth for 2016.

Samsung will be releasing its Q1 2015 financial results next Tuesday, 7^th April, just ahead of the Galaxy S6’s global launch on April 10^th.