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Samsung posted first profit slump on soft smartphone demand

Update Date:2016-1-28 15:02:38 Source:BeiJing Tannet Views:633
SEOUL-- Samsung Electronics, the world's largest smartphone maker, posted its first profit slump in five quarters as soft demand for smartphones dampened the company's Galaxy device sales and lowered prices of components such as chips and display panels.
Operating profit was 6.14 trillion won ($5.08 billion) during the October-December period, down 16.92 percent from 7.39 trillion won in the previous three months, a regulatory filing showed Thursday.

After bottoming out at 4.06 trillion won in the third quarter of 2014, Samsung's operating profit continued to rise to 7.39 trillion won in the third quarter of 2015. But, it slumped to 6.14 trillion won in the next quarter, registering the first fall in five quarters.

Samsung said that global economic uncertainties dented demand for overall IT products, including smartphones, and it resulted in lower prices of components such as memory chips and display panels, contributing to its profit decline.

Revenue was 53.32 trillion won in the three months through December, up 3.16 percent from 51.68 trillion won in the third quarter. But, net income tumbled from 5.46 trillion won to 3.22 trillion won in the fourth quarter.

Samsung said that unfavorable foreign exchange rates caused a currency loss of about 400 billion won during the quarter. The company gained some 800 billion won from favorable currency moves in the previous quarter.

The IT and mobile division, which makes smartphones, posted a fall in operating profit from 2.4 trillion won in the third quarter to 2.23 trillion won in the fourth quarter. Its revenue was 25 trillion won, taking up nearly half of the total revenue of Samsung Electronics.

Samsung sold 97 million handsets in the three months through December. Its smartphone sales accounted for the mid-80 percent of the total, the company said at a press conference. An average selling price of its handsets was in the mid-range of $180.

The article transsshipment from China Daily

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