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Worries about sales of Samsung's Galaxy S6 temper investor expectations ahead of earnings

Korean investors have begun to back off their formerly hopeful predictions that Samsung's updated flagship Galaxy S6 smartphone could mitigate the conglomerate's recent financial freefall, thanks to seemingly lackluster sales of the new handsets.




"After the first-quarter results the consensus for second-quarter earnings was somewhere in the high 7 trillion won ($6.2 billion), but now I think so long as the first digit doesn't start with a six it won't be a shock," HDC Asset Management fund manager Park Jung-hoon told Reuters. Samsung is expected to announce its second-quarter earnings guidance on Tuesday.

Some 20 of the 39 investment analysts surveyed by Thomson Reuters say that they have reduced their second-quarter Samsung forecasts within the last 30 days. The ongoing economic woes in Europe are a factor, as are reportedly constrained supplies of the more expensive S6 Edge.

Despite the revisions, analysts still believe that Samsung will guide operating profit above $7 trillion won, with a full-year profit of 27.8 trillion won in 2015. That would represent a sizable increase from the 5.98 trillion won operating profit the company posted for its first quarter.

Though Samsung has numerous and diverse interests in everything from heavy industry to household appliances, its mobile division has become its core business in recent years, and the division's slide has dragged the company down in the midst of a generational leadership change. Declining sales of high-volume, low-cost feature phones coupled with an explosion in popularity for Apple's iPhone and "white box" competitors out of China have driven South Korea's largest company into a pit it is just beginning to emerge from.