Handset makers look for better H2, stocks cleared

By Tarmo Virki and Marie-France Han

TALLINN/SEOUL (Reuters) - Global cellphone makers sales are expected to show only a slight improvement in the second quarter from the slump seen at the start of the year when shops were having to clear stocks of unsold phones.

All top cellphone makers apart from Samsung Electronics (005930.KS), are expected to report another big fall from a year ago in their quarterly sales as demand for new gadgets slumps in the recession.

Samsung is helped by a weak Korean won, and this week guided investors to expect strong second-quarter revenue and operating profit on a consolidated basis, which analysts said hinted also at stronger-than-expected performance in handsets.

Handset vendors' phone sales in the April-June quarter are seen falling 13.6 percent from a year ago to 261.7 million phones, a Reuters poll of 32 analysts showed on Wednesday.

This compares to the industry's weakest ever quarter in January-March 2009 when shops focused on clearing their stocks of unsold phones from dismal Christmas sales and the phone makers' sales dropped 13-16 percent year-on-year, according to analysts estimates, totaling 245-255 million.

The April-June market consensus has also improved a little from a 14.5 percent fall seen in a similar poll conducted in May.

ALL EYES ON OUTOOK

With results seen weak, investors and analysts will be looking at comments on the trend in consumer demand.

"Nobody is going to be fool enough to guide up for the second half, given the lack of visibility on consumer demand, but I wouldn't be surprised to hear a more positive tone in Nokia's comments," said Bernstein analyst Pierre Ferragu.

The world's top handset maker Nokia (NOK1V.HE) is expected to report next week a 72-percent drop in its April-June earnings per share from last year, a Reuters poll of 31 analysts showed on Wednesday.

Nokia is seen selling 99.3 million phones in the quarter, 19 percent less than a year ago.

Nokia and Sony Ericsson, both, will report on July 16, followed by LG Electronics (066570.KS) on July 22 and Samsung on July 24. Motorola (MOT.N) is due to report on July 30.

Motorola and Sony Ericsson are seen still struggling, with quarterly phone sales falling 43 and 36 percent, respectively.

SAMSUNG, LG TO WIN

Samsung and LG Electronics (066570.KS) are expected to pick up the market share, and show strong second quarter performance, with Samsung selling 5 percent more phones than a year ago and LG 8 percent less, still outperforming the market.