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Samsung profit decline

October 7, 2014

South Korea's Samsung Electronics has said it's expecting third-quarter earnings to fall to their lowest level in three years. The company admitted it was facing mounting competition from Apple and Chinese firms.

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Samsung Galaxy Note 4
Image: Getty Images/Ilya S. Savenok

In a preview to Q3 earnings, Samsung Electronics said Tuesday it expected operating profit to fall by nearly 60 percent year-on-year.

The South Koreans said operating earnings would come in at 4.1 trillion won ($3.8 billion, 3.0 billion euros) in the third quarter, compared to 10.16 trillion won in the same period a year earlier.

Samsung said margins would decline "due to increased marketing expenditures and lower average selling price."

Struggling to keep abreast

Once riding on a wave of seemingly endless popularity because of its earlier Galaxy smartphone models, the company has lately seen many of its customers being lured away by the bigger screen on rival Apple's new iPhone 6.

At the same time, cheaper local brands in China, one of Samsung's major markets, are making inroads into the South Korean firm's business there.

A bit of advice came from IBK Securities analyst Lee Seung-woo. "Rather than wanting stability, Samsung should seek to distinguish it phones with Galaxy's design policies," he said in a statement.

hg/sgb (dpa, AP)