​Samsung expects Q1 profits to decline by 30 percent

Samsung expects to continue to see earnings fall, estimating that its consolidated operating profit will decrease a further 30 percent to 5.9 trillion won in the first quarter.
Written by Aimee Chanthadavong, Contributor

Samsung Electronics has estimated in its first-quarter earnings guidance for 2015 that it will once again see a decline.

The South Korean electronics giant has estimated that its consolidated operating profit will fall to 5.9 trillion won ($5.4 billion), a 30 percent decrease from a year ago, when consolidated operating profit was 8.49 trillion won.

Similarly, consolidated sales will be approximately 47 trillion won, a 12 percent decrease from 53.7 trillion won, which was reported during the same period a year ago.

However, on a quarter-by-quarter basis, estimated consolidated operating profit for Q1 will be an improvement on the results that were reported during the fourth quarter of 2014, when operating profit was only 5.29 trillion won.

The slight lift will not make up for the plummet the company experienced during Q4 last year, however. The conglomerate saw its mobile and IT division's total yearly operating profit fall by over 40 percent compared to 2013, which dragged the company's yearly profit for 2014 down by nearly one third.

A partial reason behind the fall in its mobile division, in particular, was due to the tough competition it faced when Apple released the iPhone 6 and 6 Plus. Samsung has recently responded, releasing the Galaxy S6 and S6 Edge.

The only segment of the company that experienced any growth last year was its semiconductor business, which grew yearly profits by 1.89 trillion won to 8.78 trillion won, and saw sales for the full year jump by 6 percent, to 39.73 trillion won.

Ironically, Apple contributed to the growth of Samsung's semiconductor business. Apple, together with Deutsche Telekom, Ingram Micro, Sprint, and Verizon, were Samsung's top five sources of income last year, as Samsung supplies semiconductors and components to each business.

Samsung expects to release its earnings results for the first quarter at the end of April.

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