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Samsung confirms sharp drop in Q3 profit

Samsung confirms sharp drop in Q3 profit

Samsung Electronics confirmed a drop in third-quarter sales to KRW 47.45 trillion from KRW 59.08 trillion a year ago. Operating profit more than halved to KRW 4.06 trillion, and net profit fell to KRW 4.22 trillion from KRW 8.24 trillion in the same period of 2013. 

As warned earlier by the company, the weak results were due mainly to competitive pressure on its mobile phones business. The mobile division recorded sales of KRW 24.58 trillion, down from KRW 36.57 trillion a year ago and 14 percent less than in the second quarter. Operating profit from the activities plunged to KRW 1.75 trillion from KRW 6.70 trillion in Q3 2013. 

Samsung said smartphone shipments were up “slightly”, mainly in the low-end and mid-range segment, leading to a lower average selling price and pressure on margins. The Galaxy Note 4 launched at the end of the quarter only had a marginal impact on sales. The tablet market remained highly seasonal, with the new Tab S helping grow shipments. Samsung said it expects seasonal market growth in Q4, but competition and price pressure will intensify as a large number of new models come out. 

At Samsung’s other activities, semiconductors was the only one to show revenue growth in the quarter, led by solid memory demand from the PC and phone markets. The TV market was weaker after the run-up to the World Cup, and the display business saw a slowdown in the OLED market. 

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