* Q1 operating profit seen at 8.3 trln won, up 46 pct y/y
* Handset shipments seen up 10 pct at record 70 mln -
* Profits seen rebounding to record in Q2 on new Galaxy S IV
By Miyoung Kim
SEOUL, April 5 Samsung Electronics Co Ltd
, the iPhone's main adversary, is expected to post a
46 percent jump in first-quarter earnings as sales of mid-tier
smartphones helped tide the South Korean giant over the off-peak
Samsung, due to release its January-March earnings guidance
early on Friday, likely increased its quarterly operating profit
to 8.3 trillion won ($7.5 billion), a survey of 42 analysts by
Thomson Reuters I/B/E/S showed. That would be 6 percent less
than the record 8.84 trillion won earned in October-December.
The Galaxy S and Note series have fuelled Samsung's
record-breaking earnings growth and made it the No.2 player in
the global premium smartphone segment after Apple Inc.
But as the high-end market swarms with new offerings, Samsung is
turning to less affluent customers in emerging markets, offering
cheaper models such as the Rex and Galaxy Pop, analysts said.
"Increasing sales of mid-tier products on top of the usual
solid sales of its flagship models of the Galaxy S and Note
probably helped Samsung fare better than its peers," said Lee
Sun-tae, an analyst at NH Investment & Securities.
"The first quarter will be the bottom of its earnings cycle
for this year, and things will only get better from here as it
rolls out new mobile products."
Samsung capitalised on its 30-plus smartphone models that
cover nearly all price points to boost shipments to a record in
the first quarter while the post-year end holiday season dulled
sales at Apple, analysts said.
The South Korean firm likely shipped 68-70 million
smartphones, up from 63 million in the December quarter,
according to five analysts.
By comparison, Apple's iPhone shipments likely slumped some
30 percent to the 30 million range from 47.8 million in the
previous quarter, they said.
Shares in Samsung, worth around $220 billion, fell 3 percent
over the past three months, exceeding a 2 percent drop in the
wider market. Apple lost 19 percent in the same period.
END OF RECORD QUARTERS
The 8.3 trillion won estimated operating profit for
January-March will mark the end of five record quarters.
But analysts said Samsung will likely mint a fresh all-time
high of 9.7 trillion won in the current quarter as the Galaxy S
IV hits the market later this month.
Of the 42 analysts surveyed by Thomson Reuters I/B/E/S, four
predicted Samsung might surprise with a record first-quarter
profit of up to 9.0 trillion won after the firm slashed spending
on marketing from 12.8 trillion won in the fourth quarter.
Samsung's mobile devices division alone is estimated to have
earned 5.8-6.4 trillion won in the first quarter, eclipsing the
entire 5.7 trillion won that Samsung earned in the year-earlier
period from all its businesses.
JPMorgan, the most bullish, estimates Samsung will report a
6.7 trillion won profit from the mobile division alone.
Samsung, which gets 70 percent of its overall profit from
its mobile devices business, is due to release its final
first-quarter earnings results by April 26.
Soaring smartphone sales are increasingly becoming a major
pillar just when parts supplies to Apple slow.
Lee at NH Investment & Securities estimates that Samsung's
microchip production rate fell to 80 percent of capacity due to
reduced orders from Apple as its biggest mobile processing chip
client struggles with weak sales of iPad tablets.
"Reduced microchip sales to Apple is a major drag for its
chip business, although recovery in computer memory chip prices
eased the Apple impact on the overall bottom line," said Seo
Won-seok, an analyst at Korea Investment & Securities, slashing
the first-quarter earnings forecast for Samsung's chip business
by 11 percent.
Samsung pushed back construction of a new chip plant late
last year, and said it would keep this year's investment
flexible as Apple diversifies away from Samsung in component