Samsung earnings hit by tumbling mobile sales
South Korean tech giant Samsung Electronics has reported their first annual earnings decline in three years. Their net profit fell 27% from a year earlier to 5.3tn won ($4.8bn; £3.2bn) in the period of October to December, in line with expectations. However, their profit of 25tn won for the year, down from a record 36.8tn won in 2013, was the lowest since 2011. The world’s largest smartphone maker has been facing stiff competition from Apple and cheaper Chinese rivals. The revenue generated by their mobile business, which was the driver of record earnings in 2013, tumbled 23% in the fourth quarter from a year ago, whilst for the year it fell 19%. In general, the company’s sales fell 11% in the fourth quarter.
In spite of their earnings coming within market expectations, the conglomerate’s shares closed down 1.3% in Seoul. The question for their smartphones and tablets will carry on falling in the first quarter of this year compared to the previous due to the fact of seasonal factors, stated Samsung on Thursday. They said in the statement; “The mobile business will focus on increasing sales and improving business performance through new product line-ups, such as the Galaxy A series”. The firm’s uninspiring earnings come just a day after rival Apple reported the largest quarterly profit ever made by a public company. Looking at the positive side, a boom in Samsung’s high-margin chip sales helped offset the downturn in its mobile business. Their semi-conductor division’s operating profit soared nearly 36%in the quarter.