Samsung Profit Dives In Q3
Samsung posted net profit of 4.22 trillion won (around $4.56 billion) for the quarter, down from 8.22 trillion won in last year’s corresponding quarter, and down from 6.25 trillion won in the 2014 second quarter.
Operating profit fell 60 per cent year-on-year to 4.06 trillion won, in line with Samsung’s earlier earnings guidance for the quarter.
Samsung’s mobile division was hit hard, recording operating profit of 1.75 trillion won, down from 6.7 trillion won year-on-year.
Samsung noted while shipments were up slightly, driven by mid-to-low-end products, the average selling price (ASP) was down due to a reduced price for older models and a declined shipment portion of high-end products.
The release of the Galaxy Note 4 around the end of quarter had had a marginal impact, Samsung stated.
Meanwhile, International Data Corporation (IDC) figures have revealed the increasing pressure on Samsung from all corners of the smartphone market.
The IDC reported the global smartphone market grew 25.2 per cent year-on-year in the 2014 third quarter, however found Samsung was the only company among the global top five vendors to see its shipment volume decline year-on-year.
Apple, which released its iPhone 6 and iPhone 6 Plus during the quarter, posted its largest ever third quarter volume.
“With continued competitive pressure from nearly every side coupled with cooling demand for its high-end devices, the company’s volumes have fallen from their previous highs at the start of the year,” the IDC stated.
“Although Samsung has long relied on its high-end devices, its mid-range and low-end models drove volume for the quarter and subsequently drove down ASPs.”
As reported by Reuters, looking ahead to the fourth quarter, Samsung has stated it “cautiously expects an earnings increase, driven by strong seasonal demand for TVs and continued growth momentum for the memory business”, with the mobile division’s outlook remaining uncertain.