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Samsung shares drop 4.6% on estimates of lower operating profit

Samsung’s shares bob up and down based on analysts’ predictions of the company’s earnings. The latest change was a hit to share price because of estimates that the company will posts a lower quarter to quarter operating profit. The stock closed at 4.6% down.

The official numbers are expected to come out next Tuesday, but analysts have already reported in their expectations.

The average is a 1% increase for a record operating profit to 10.3 trillion won, but according to Starmine SmartEstimate (which averages only predictions from the most accurate analysts) suggests a 3.6% drop to 9.9 trillion won.

The big problem is the strong Korean won – it’s the highest it’s been since mid-2008 and Samsung takes payment for its components in US dollars. The OLED business isn’t doing too hot either.

Peter Yu, analyst at BNP Paribas, estimates that a 1% change in the won exchange rate would result in a 4% change to the operating profit of the component business. His estimate is also one of the lowest, 8.8 trillion won, 14% down.

The strong won has also affected the shares of car makers Kia (6.1% down) and Hyundai (5.1% down).

This isn’t the first time Samsung shares have taken a hit due to predictions of what the company’s final numbers might look like.



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