Samsung estimates fourth-quarter profit decline of 37.4 per cent
08 Jan 2015
Samsung Electronics said its fourth-quarter profit likely declined 37.4 per cent, confirming expectations for its first year of profit decline since 2011 as it struggled to retain lead position Reuters reported.
The South Korean tech giant lost market share for three consecutive quarters up to July-September, and according to analysts the trend likely continued in the October-December period thanks to competition from Apple's new iPhones and cheaper Chinese rivals like Xiaomi.
According to Samsung, its fourth-quarter operating profit was likely to be 5.2 trillion won ($4.74 billion), beating a mean forecast of 5 trillion won from a Thomson Reuters survey of 44 analysts.
The outlook meant Samsung's 2014 profit would likely come in at 25 trillion won, the weakest in three years, although it marked a rebound from the 4.1 trillion won profit of the third quarter which was the firm's lowest quarterly result in over three years.
Samsung shares were trading 1 per cent higher as of 0110 GMT, rising with the broader market, on hopes that quarterly profits had bottomed.
According to Greg Roh of HMC Investment who referred to the solid sales of Samsung's latest flagship phone, there were concerns about the mobile division, but it looked like the won's recent weakness against the dollar and the Galaxy Note 4 impact helped.
Meanwhile PTI reported that the company sales about 52 trillion won were down 12.3 per cent from a year earlier.
The estimate did not offer any profit forecast or details of divisional earnings, which would be provided in an audited earnings report later this month.
The South Korean behemoth, which also faced a once-in-a-generation leadership change, saw a sharp decline in net profit by 20 and 50 per cent in the second and third quarters of 2014 respectively.
The plunge comes after several years of stellar growth, driven by surging smartphone sales.
However, the company's flagship Galaxy phones had suffered in the high-end market with the rising popularity of arch-rival Apple's iPhone 6, while Chinese handset makers like Lenovo, Huawei and Lenovo challenged the company's dominance of the middle- and low-end handset segment.
In mainland China, the largest smartphone market in the world, Samsung was ousted from its number one position in the second quarter of 2014, by Xiaomi with its cheap, feature-packed handsets.
