Samsung Electronics, the world’s largest TV and Mobile manufacturer has forecast a 37.4 percent fall in its quarterly profits, compared to the same period of last year as per a report from BBC.
Samsung revealed in its preliminary earnings guidance that the company is expecting 37% decrease in profits for the Q4, 2014. It stated that operating profit for the October-December period was estimated at 5.2 trillion won ($4.7 billion), down 37.4% from the fourth quarter of the last year.
Samsung is expecting its sales for the fourth quarter of 2014 at around 52 trillion won (about $47.3 billion) which is a 12 percent decrease year-over-year. Samsung also witnessed its net profit decline by 20 and 50 per cent in the second and third quarters of 2014 respectively. This forecast signals the fifth consecutive quarter of decline in operating profit.
These numbers however are a mere confirmation of an already established fact. Samsung recently sold ogg its units in the defence and chemical sectors, to “focus more on its core sectors”. It went through a major executive re-shuffle, though its mobile head still managed to retain his position.
Major factor behind Samsung’s declining profits are the flagship smartphones of the company – the Galaxy S5 and Note 4 which have been running on a slow pace. This is quite an irony, considering that flagships are supposed to fuel the growth and not suppress it.
Moreover, some stiff competition from mid-range smartphone brands like Xiaomi is also a quantifiable reason enough for Samsung’s straight quarterly losses. Xiaomi, which had already zoomed in to become world’s 3rd largest smartphone vendor, recently raised a staggering $1.1 Billion investment, which valued the company at an even staggering $45 Billion.
But if you are a Samsung loyalist, don’t you fret ! Samsung has sent a team of ‘experts’ to look into the issues in China and bring back those old glory days. Stay Calm !