The third-quarter preliminary operating profit for Samsung Electronics has fallen to the early 4-trillion-won level in three years. The company said on October 7 in an earnings guidance that its operating profit for the quarter was 4.1 trillion won on the sales revenue of 47 trillion won.
This is almost comparable to the level reached in the third quarter of 2011 when the company posted operating profit of 4.25 trillion won. Beginning in the fourth quarter of 2011, it has been on a roll to record a quarterly operating profit as high as 10 trillion won last year.
The third-quarter operating profit of 4.1 trillion won is down 42.98 percent from the previous quarter's 7.19 trillion won and 59.0 percent from a year ago. This is even smaller than the second-quarter operating profit volume posted by the company's IT and mobile unit (4.42 trillion won). In the latest announcement, Samsung Electronics did not give detailed profit figures for different units.
Industry analysts said that the most important reason for the company's disappointing results following the second quarter has to do with the fact that it is being fast chased by nimble Chinese smartphone manufacturers such as Huawei, Lenovo, and Xiaomi in the low- and medium-priced smartphone models. The Galaxy S5, the latest version of Samsung's flagship Galaxy Series smartphones, has been languishing in the market after its launch in April this year. The Galaxy Series smartphones have led the market and boosted the company's bottom line for the past two years.
Samsung Electronics’ 4Q Estimates Halved in Three Months - Analysts are cuttingestimates for the fourth-quarter performance of Samsung Electronics whichreleased “earnings shock” results for the second and third quarter of thisyear.
Amid prevailingforecasts that Samsung’s smartphone division could recover from next year atthe earliest, the fourth-quarter estimates for Samsung’s earnings, released bysecurities firms, halved in just three months.
According tofinancial information provider FnGuide on October 7, the quarterly earningsestimates for Samsung, released by securities firms over the past one month,averaged at 4.67 trillion won, about 44.8-percent downward revision compared to8.47 trillion won projected three months ago.
This figure isdown 43.7 percent compared to 8.31 trillion won recorded in the fourth quarterof 2013.Analysts’ average fourth-quarter estimates for Samsung’s earnings havebeen reduced by almost 1 trillion won per month, falling to 6.5 trillion won amonth ago from 7.5 trillion won two months ago and 8.5 trillion won threemonths ago.
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