The world's biggest smartphone maker by shipments said Friday earnings from its mobile division was flat compared with a year earlier as price competition intensified in the handset market. Its results for the quarter ended Dec. 31 were also pressured by currency fluctuations that hit its earnings by 700 billion won ($651 million) and a special bonus to employees.
"Amid macroeconomic uncertainties such as a strong Korean won and increased concerns over possible quantitative easing tapering in the U.S., our earnings were lower than what the market expected," Robert Yi, head of Samsung's investor relations, said in a statement.
Still, Samsung will continue to spend heavily on capital expenditures, predicting that it will spend close to 23.8 trillion won in 2014 to upgrade its facilities and expand production of memory chips, displays and other consumer electronics. Faced with slowing handset sales and a falling stock price spurred by the company's first operating profit decline in more than two years, the South Korean technology giant has been under pressure to find new ways to impress consumers. After the earnings were released, Samsung shares dipped by as much as 0.6% at one point, before ending the day up 0.6%. The stock is down 5% so far this year.
For the first quarter, the company said it expects demand for smartphones, tablets, televisions and displays will decline because of seasonal weakness, which could pressure its earnings further.
Samsung said net profit for the three months ended Dec. 31 rose 3.7% from a year earlier to 7.3 trillion won from 7.04 trillion won. Growth slowed significantly from the third quarter's 25.6%, as healthy margins from the company's chip unit weren't enough to offset cooling profit momentum for Samsung's high-end Galaxy smartphones. The company also spent 800 billion won for a special bonus to celebrate the 20th anniversary of Chairman Lee Kun-hee's new management strategy. The Korean won strengthened 2% against the U.S. dollar and 11% against the Japanese yen in the fourth quarter, hurting the company's overall earnings. Read more..
"Amid macroeconomic uncertainties such as a strong Korean won and increased concerns over possible quantitative easing tapering in the U.S., our earnings were lower than what the market expected," Robert Yi, head of Samsung's investor relations, said in a statement.
Still, Samsung will continue to spend heavily on capital expenditures, predicting that it will spend close to 23.8 trillion won in 2014 to upgrade its facilities and expand production of memory chips, displays and other consumer electronics. Faced with slowing handset sales and a falling stock price spurred by the company's first operating profit decline in more than two years, the South Korean technology giant has been under pressure to find new ways to impress consumers. After the earnings were released, Samsung shares dipped by as much as 0.6% at one point, before ending the day up 0.6%. The stock is down 5% so far this year.
For the first quarter, the company said it expects demand for smartphones, tablets, televisions and displays will decline because of seasonal weakness, which could pressure its earnings further.
Samsung said net profit for the three months ended Dec. 31 rose 3.7% from a year earlier to 7.3 trillion won from 7.04 trillion won. Growth slowed significantly from the third quarter's 25.6%, as healthy margins from the company's chip unit weren't enough to offset cooling profit momentum for Samsung's high-end Galaxy smartphones. The company also spent 800 billion won for a special bonus to celebrate the 20th anniversary of Chairman Lee Kun-hee's new management strategy. The Korean won strengthened 2% against the U.S. dollar and 11% against the Japanese yen in the fourth quarter, hurting the company's overall earnings. Read more..
Source: Latest Technology News
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