Samsung Quarterly Profit Growth Slows
Published on: 24th Jan 2014
By: Ian Mansfield
Samsung has reported its slowest quarterly profits growth in two years as the company was hurt by pressure on profit margins in its smartphone division.
The company posted a new profit that was up by 5.4 percent compared to the previous year, of KRW7.22 trillion (USD6.7 billion).
A one-off anniversary bonus, and currency losses also helped to pull down the company's performance.
Quarterly revenues for the three months to the end of December came in at KRW59.3 trillion.
"Amid macroeconomic uncertainties such as a strong Korean won and increased concerns over possible quantitative easing (QE) tapering in the U.S., our earnings were lower than what the market expected due to a negative currency impact of around 700 billion won and a significant one-off expense of about 800 billion won, however, fourth quarter operational results were respectably strong. Looking at the quarterly earnings trend, we expect 2014 to follow last year's pattern of a weak first half and a strong second half as usual," said Robert Yi, Senior Vice President and Head of Investor Relations.
Capital spending in 2014 will be similar to last year, it said. The company spent KRW23.8 trillion on capital expenditure in 2013.
The earnings of the mobile communications division fell slightly compared to the previous quarter due to seasonally increased marketing expenditures and a one-off expense. Meanwhile, tablet shipments rose sharply on strong sales of GALAXY Tab 3 and GALAXY Note 10.1 (2014 Edition), released during the end of the third quarter.
Samsung also confirmed that it will be targeting the tablet market with a larger screen model later this year, as well as expanding its smartphone portfolio.