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Samsung expected profit decline in the fourth quarter

2014-03-21  |  Comebuy News

Samsung expects that its operating profit will shrink in the fourth quarter of 2013 compared with the previous year by 18 percent to 8.3 trillion won (5.7 billion euros). As reasons for the decline, the Korean company specifies the saturation of the Smartphonemarkts and the increasing competition from Apple.

The forecast is significantly lower than the 10 trillion won (6.9 billion euros), predicted by analysts surveyed by Bloomberg. Called Samsung sales of 59 trillion won (40.5 billion) lags behind the expectations of Wall Street, which had expected 61.5 trillion won.

"Even when taking into account one-time costs, the profit is lower than expected", quoted Reuters Lee Seung-woo, analyst with IBK investment & securities. "Samsung has called although no details, but the Smartphone profit has evolved may be worse in the face of increased marketing costs than expected."

Samsung had first and foremost its Semiconductor Division due to the operational record profit of 10.2 trillion won in the third quarter. She could compensate for the lower demand in the Smartphonemarkt. The profit was also strengthened by selling cheaper smartphones in emerging markets such as China, South America and Eastern Europe.

However, it is expected that the result will be charged by Samsung's Mobile Division in the fourth quarter, which was last responsible for two-thirds of the net income from declining sales of its flagship model. The competition in China is also reinforces mobile through Apple's agreement with China that offers the iPhone 5 and 5 C in the people's Republic from January.

Already at the beginning of the year, investors had voiced their concerns about slower profit growth at Samsung. The share price of the company eased it down significantly, reducing the market value to nearly $9 billion.

[with material by Steven Musil,]

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