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As expected and predicted by many analysts, Samsung announced on Monday that it expects its operating profits for the third quarter of 2014 to decline by nearly 60 percent.
According to Samsung’s estimates, it will only be recording a profit of $3.8 billion — an astounding drop of 59.7% on a YoY basis. The Korean giant also estimated a 20% drop in its sales for the third quarter of 2014. A point to note, however, is that the 60% drop in profit is for Samsung Electronics as a whole and not just for its mobile division. While the company says that its mobile shipments actually increased, their average selling price (ARP) and higher marketing costs hurt its margins.
Samsung had struggled in the Q2 of 2014 as well with Micromax and Xiaomi toppling it as a the number one smartphone OEM in India and China, respectively. The company also saw its shares, profit and sales decline to an all-time low since 2012 in the second quarter.
Samsung’s latest phablet — the Galaxy Note 4 — will go on sale in around 140 countries around the world by the end of October, so its release will only show a positive (or negative) effect on the company’s Q4 balance sheet.
[Via ZDnet]
