Samsung Warns of Lower 4th-Quarter Operating Profits
Published on: 7th Jan 2014
By: Ian Mansfield
Samsung has broken its seemingly unending rise in profits and announced that it expects its fourth quarter operating profit to be down by around 6 percent compared to a year ago.
At KRW 8.3 trillion (US$7.8 billion) operating profit would be down by 18 percent compared to the previous three months. Samsung does not say in its preliminary statement what caused the decline, but analysts expect tightening margins on smartphones to be the main cause.
Revenues are expected to come in at around KRW59 trillion, which is slightly below average expectations.
The company is also now facing increased competition in the huge Chinese market as Apple launches its handsets with China Mobile, and low-cost Android vendors take market share at the other end of the market.
The company is also expected to face further competition from Apple later this year, if Apple as expected announces a range of screen sizes targetting Samsung's traditional dominance of the phablet market.
However, the company still has a cash pile estimated at around US$50 billion to dip into, even after handing out US$1 billion in anniversary bonuses last year.
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