Samsung Profit Slides Despite The S6 Edge Shortage

Such is the haphazard and cutthroat nature of the smartphone market that even the world’s leading vendors get it wrong sometimes when it comes to anticipating demand — and that can have a detrimental effect on revenues.

Samsung says it probably miss forecasts for the second quarter, with operating profit from April to June likely to slide 4% on an annual basis to 6.9 trillion won ($6.13 billion). Analysts had forecast earnings at 7.2 trillion won ($6.35 billion).
That will mark the second-consecutive quarterly profit decline for Samsung on an annual basis, at a time when the company is struggling to revitalize its product portfolio while Apple takes a bigger bite of the market on the high end and low-cost players like Xiaomi and India’s Micromax sell more phones on the lower end.

One of Samsung’s bigger recent problems has been supply issues with its S6 Edge smartphone. The S6 Edge is pricier than then the S6 and since previous Edge devices had not sold well, Samsung reasoned (somewhat understandably) that the regular S6 would outsell the Edge by 4 to 1, writes Edison Investment Research analyst Richard Windsor in a research note. “Unfortunately this was not the case.”

Demand was roughly 1 to 1, which left a shortage of S6 Edge devices and a supply glut on the regular S6.

“This is a common occurrence in the handset market where demand is notoriously difficult to predict,” says Windsor. 

Hence, overall shipments of the S6 weren’t as strong as Samsung might have hoped.

Currency volatility in emerging economies probably also impacted sales, analysts have said.

“The good news is that margins have held up well,” Windsor says, adding that Samsung’s handset business will probably be able to improve on its first quarter results.  “Furthermore, with [the second quarter] out of the way, the comparisons become much easier as it was in Q3 2014 when the handset business collapsed. This means that Q2 2015 should be the last quarter where the headlines are overwhelmingly negative.”

That doesn’t mean an explosion of growth at Samsung’s all-important Device Solutions unit, but something more like single-digit earnings growth for the next couple of years, he adds.

Samsung must now focus on protecting margins at its once-flourishing mobile business while putting more investment back into its semiconductor division. 

While Samsung didn’t break down its earnings projections by business unit, the company’s chips business has seen encouraging growth in the last few quarters, and that at least has made up for some of the declines in the handset business.Samsung’s full second-quarter results are out later this month.


From: http://www.forbes.com/

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The Best Selling Vehicles Of Ford Philippines

MANILA – Ford Philippines posted a 10 percent sales increase in June led by continued demand for the EcoSport, Ranger, and Explorer.

Ford said it sold 1,870 units in June, its best-ever performance for the period.

Ford's top-selling model in the Philippines, the Ranger, sold 755 units in June, up 26 percent year-over-year.

EcoSport's sales also increased 59 percent year-over-year to 767 units.

The Explorer SUV, meanwhile, posted sales of 110 units, a 24 percent jump year-over-year.

“We’re continuing to be a leading brand of choice for Filipino
customers across the country, and it’s so exciting to see our global Ford vehicles, particularly Ranger and EcoSport, continue to build on their success by appealing to an even wider range of customers’ lives and lifestyles,” said Kay Hart, managing director at Ford Philippines.

Ford is set to open dealer branches in Sta. Rosa and Ormoc this month, bringing the number of authorized dealers to 38 locations.

The firm is planning to have 40 dealerships by the end of the year.

“Our ongoing dealership expansion is helping to better serve our growing base of customer across the country, and ensure the very best customer and ownership experience with convenience, accessibility and world-class service,” said Hart.

From: abs-cbnnews.com

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NTC Approved Globe Takeover Of Bayantel

MANILA, Philippines – The National Telecommunications Commission (NTC) finally gave Globe Telecom Incorporated the green light to take over Bayan Telecommunications Incorporated (Bayantel).

In a 19-page decision, the NTC approved the joint application filed by Globe and Bayantel for a debt to equity transaction, wherein Globe would take at least 54% controlling stake in Bayantel.

NTC commissioner Gamaliel Cordoba, deputy commissioner Carlo Jose Martinez, and deputy commissioner Delilah Deles signed the decision dated July 2.

In the ruling on the case docketed under NTC Case No. 2013-218, NTC cited the Supreme Court ruling in Montoya vs Ignacio “the law really requires the approval of the Public Service Commission in order that a franchise, or any privilege pertaining thereto, may be sold or leased without infringing the certificate to the grantee.”

The regulator gave assurances that it has adopted safeguards to foster and ensure a level playing field, including conditions attached to the approval of the frequency sharing arrangement between Globe and Bayantel.

“The Commission finds that the acquisition by Globe of controlling interest in Bayantel pursuant to the court-approved amended rehabilitation plan and master restructuring agreement neither poses any prejudice to the public interest and convenience nor will make the service fail to operate or function better,” it added.

NTC pointed out that it does not find any reason to defer the proceedings of the joint application in the absence of an injunction form the Court of Appeals.

Contested

The approval came exactly 21 months after the joint application was filed in October 2013.

Rival Philippine Long Distance Telephone Company (PLDT) opposed the planned takeover of Bayantel by Globe. 

PLDT argued that there appeared to be no reasonable financial benefit for Globe to acquire Bayantel, which had a capital deficit or negative retained earnings of P15.87 billion ($352.05 million).

It added that NTC should also auction the radio frequency of Bayantel that has not been used for 14 years. It warned that Globe stands to acquire a grossly disproportionate amount of frequencies in relation to subscribers, as it currently accounts for 32% of the cellular market as against PLDT’s 68%.

The following also opposed the takeover: Smart Communications Incorporated; Digitel Mobile Philippines Incorporated; Cruz Telephone Company Incorporated; Philippine Association of Private Telephone Companies; Eastern Telecommunications Philippines Incorporated; Telecommunications Technologies Philippines Incorporated; and Next Mobile.

Globe argued, however, that the radio frequencies being disputed by PLDT are vital to the rehabilitation of Bayantel that was approved by a lower court in Pasig City in August 2013. 

Bayantel has been under a court-assisted corporate rehabilitation since 2003 and got the approval of the Regional Trial Court (RTC) Branch 158 in Pasig City in August 2013 for its amended Rehabilitation Plan, wherein Globe would convert its debt holdings into equity.

The Pasig City RTC approved the master restructuring agreement (MRA), wherein Globe would acquire a 56.6% stake in Bayantel through the conversion of 69% of Bayantel’s total debt.

In return, the outstanding principal debt of Bayantel would be reduced by 69% to $131.3 million from $423.3 million.

Bayantel’s outstanding debt stood at $497 million when it was placed under corporate rehabilitation. It has reportedly settled a total of P8.19 billion ($181.69 million) since it filed for supervised rehabilitation proceedings. It also intends to pay its $325 million outstanding debt within 2023. – Rappler.com

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