Samsung expects year-on-year operating profit to fall 60%

Samsung expects year-on-year operating profit to fall 60%Samsung is being relentlessly tarred with the doom brush these days, giving Apple a well-earned rest at least, and today we’re hearing much the same story as we did back in July this year, when Sammo warned of a less-than-impressive Q2.

Prior to announcing its final Q3 results, Samsung is telling us to brace for a real stinker; its worst quarter in years.

In a mournful post on Global Tomorrow, Samsung relays guidance of 47 trillion Korean won in sales, and 4.1 trillion Korean won in operating profit (roughly £2.3 billion).

As is often the case, those figures look pretty good on the face of it, and indeed some rival manufacturers would kill for those numbers, but looking at the year-on-year change, things start to smell.

To give the guidance above some much-needed context, Samsung recorded 59.1 trillion Korean won in sales in the year-ago quarter, and 10.2 trillion Korean won in operating profit, so that’s a drop of 20% and 60% respectively.

It’s an increasingly familiar story, with Samsung seemingly taking a pounding from Apple at the high end (the Galaxy Note 4 launch was reportedly brought forward in response to the overwhelming popularity of the iPhone 6), while Chinese manufacturers continue to chip away at the low end.

The Samsung Galaxy Note 4 is on the verge of rolling out globally, but it remains to be seen how much appetite there is for the device, and indeed its price is tipped to fall by as much as 34% in just three months.

Suddenly all eyes are on Samsung to see if it can “innovate” its way out of the current slump, but we seriously doubt the internally lauded Galaxy Alpha series (the "evolution of Galaxy design") is enough to make even a slight dent.

Samsung’s official 3Q14 results will follow in due course, but don’t expect them to vary wildly from the guidance already posted. Eek.

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 1 comment

JanSt / MOD  Oct. 7, 2014 at 17:49

No offence, but they had that coming.
Their flood strategy couldn't work forever.

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