Samsu ng on Thursday said it expects fourth quarter operating profit to be down 37.4% on a year ago.
According to its preliminary earnings guidance, the South Korean electronics giant turned an operating profit of 5.2 trillion won (€4.02 billion) in the three months to 31 December, compared to KRW8.3 trillion in the fourth quarter of 2013.
Samsung expects to report Q4 group revenue of KRW53 trillion (€40.97 billion), down from KRW59 trillion a year ago.
Unlike in previous guidance announcements, the company did not provide an explanation for the results. While it won’t set alarm bells ringing, it will do little to assuage concerns about Samsung’s prospects in the face of growing competition from low-cost smartphone makers and a strong showing from Apple’s latest iPhones.
Indeed, according to figures published on Wednesday by Kantar Worldpanel Comtech, Apple’s share of U.S. and European smartphone sales in the three months ended November 2014 grew by 4.3 percentage points and 6.3 percentage points respectively. By comparison, Android – Samsung’s primary OS – saw its share decline by 2 percentage points in the U.S. and 3.2 percentage points in Europe.
However, Samsung’s Q4 performance was not as underwhelming as it was in Q3, when it reported a 73.9% on-year fall in operating profit to KRW1.75 trillion (€1.3 billion). It was a major contributing factor to the 19.7% decline in Samsung’s group revenue, which came in at KRW47.45 trillion. The lacklustre performance was attributed to rising competition in the smartphone market.
