According to a new report from the Wall Street Journal, profits of Samsung Electronics in the third quarter is less than half from a year ago quarter as a result of weak smartphones sales. The decline in sales is largely attributed to strong competition from Chinese vendors, who continues to pressure its mobile division profit.
From the report:
The world’s largest smartphone maker by shipments said Tuesday its third-quarter operating profit likely fell 57.8% to 61.8% from a year earlier to between 3.9 trillion won ($3.6 billion) and 4.3 trillion won ($4.0 billion). Last year, Samsung reported an operating profit of 10.2 trillion won. A poll of seven analysts expected Samsung’s operating profit to come in at 4.3 trillion won.
Expectations for the quarter have already been low as sales of Samsung’s flagship device, Galaxy S5 have been weaker than expected and the company only began to sell its new smartphone-tablet hybrid the Galaxy Note 4 last month.
Samsung said in a statement that while smartphone shipments increased in the quarter, its operating margin was weighed down by hefty marketing costs and falling average selling prices. It didn’t provide specific figures.