Samsung expects first quarter profit decline

Samsung expects to report a quarterly profit decline, with the company estimating a 2014 first quarter operating profit of approximately 8.4 trillion Korean won.
Written by Leon Spencer, Contributor

Samsung has told investors it expects an operating profit of approximately 8.4 trillion Korean won (AU$8.6 billion) for the three months ending 31 March, down from the previous year's first quarter profit result of 8.78 trillion won.

The Korean technology giant published its first quarter earnings guidance on Tuesday. The profit estimate is 4.3 percent down from the results of the same quarter in 2013.

Samsung's figures came in slightly below an average forecast of 8.5 trillion won, according to 40 analysts polled by Thompson Reuters, and up from the 8.3 trillion won expected by 29 analysts polled by Bloomberg.

The forecast profit results represent a second straight quarterly profit decline for the world's biggest smartphone manufacturer.

Samsung also said that its consolidated sales guidance for the first quarter of the year was approximately 53 trillion Korean won, slightly up from the previous year's first quarter result of 52.87 trillion won.

The result follows slowing sales of high-end products due to market saturation, and the launch of new Apple iPhones into the market, according to a report by Bloomberg.

However, the release of the Galaxy S5 on Friday, with its 16-megapixel camera, heartbeat monitor, and fingerprint scanner, is expected to reinvigorate consumer interest and increase sales volumes.

"With the Galaxy S5, Samsung is going back to basics to focus on delivering the capabilities that matter most to our consumers," said president and head of IT and mobile communications division at Samsung, J.K. Shin, in a statement earlier this year.

Samsung's revenue, at AU$1.16 billion, is equivalent to 17 percent of South Korea's GDP, according to Bloomberg Businessweek.

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