SAMSUNG Electronics is heading for its first annual fall in profits since 2011, after it revealed yesterday its profits between July and September would be the lowest in more than three years due to dwindling demand for its high-end Galaxy smartphones.
Samsung said its profit for the third quarter would likely fall 59.7 per cent to 4.1 trillion won (£2.36bn), well below a mean analyst forecast of 5.6 trillion won.
“Smartphone shipments increased marginally amid intense competition,” Samsung said. “However, the operating margin declined due to increased marketing expenditure and lowered average selling price.”
This would mark the South Korean giant’s weakest quarterly profit since the second quarter of 2011 and the fourth consecutive quarter of profit declines. Samsung said although “uncertainty” persisted in the mobile business, which accounted for nearly 70 per cent of its 2013 operating profit, it “cautiously expects” higher shipments of new smartphones and strong seasonal demand for TVs.