Samsung looks to annual profit decline

Now Reading:

Samsung looks to annual profit decline

Text size Aa Aa

Samsung has confirmed expectations for its first annual decline in profit since 2011.

The South Korean technology giant has been losing market share with strong competition from Apple’s new iPhones and cheaper Chinese rivals.

However it remains a global smartphone leader and a profit pickup in the fourth quarter hinted that earnings may have stabilised in the short term.

There is healthy demand for the memory chips it makes for personal computers and smartphones, and it has launched a number of new mid and low priced smartphones.

However analysts say the company’s new focus on mid-to-low tier smartphones will squeeze margins and cap profits, offsetting the benefits of the expected increase in sales.

“There were concerns about the mobile division but it looks like the won’s recent weakness against the dollar and the Galaxy Note 4 impact helped,” HMC Investment analyst Greg Roh said, referring to solid sales of Samsung’s latest flagship phone.

“I expect profits to continue improving through at least the second quarter of 2015,” he added.

The company is expected to release its annual results around the end of January.