Samsung Electronics Co., the world’s top smartphone maker, said Thursday its net profit nearly halved in the third quarter from a year earlier, as its faltering smartphone business dragged down overall sales.
Net profit reached 4.22 trillion won (US$4.01 billion) in the July-September period, down 48.7 percent from 8.24 trillion won the previous year, the company said in a regulatory filing.
Operating profit plunged 60 percent on-year to 4.1 trillion won, from a record high of 10.1 trillion won in the same quarter of 2013.
Both the net and operating profit mark the lowest in three years for the Suwon-based company, since it logged 4.02 trillion won and 3.75 trillion won in the fourth and second quarter of 2011, respectively.
The net profit also represents a fourth consecutive quarterly decline, with the operating profit having slid for two straight quarters.
Sales came to 47.4 trillion won in the third quarter, down 19.6 percent from a year earlier.
The figures were in line with Samsung’s earnings preview released earlier this month.
The weaker bottom line was attributed to a downturn in its mainstay smartphone sector, Samsung said in its earnings release.
“The new lineups such as the Galaxy Note series failed to get enough market demand, while the average selling price of older models fell.”
The operating profit in the IT mobile sector plummeted to 1.75 trillion won in the third quarter from 6.7 trillion won a year ago.
Its consumer electronics division posted operating profit of 50 billion won, compared with 350 billion won the previous year. The company cited the absence of a one-off factor since the World Cup and rising panel prices.
But sales of premium ultra high-definition TVs gained 24 percent from three months earlier on robust demand from China, Samsung added. It didn’t disclose comparable on-year figures.
The display and panel part remained sluggish due to weak sales in organic light-emitting diode (OLED), although shipments of liquid crystal displays (LCD) increased on the back of higher panel prices.
The memory chip division suffered the lightest blow, propped up by firm seasonal demand for DRAMs and NAND flash chips, Samsung said.
It logged 2.33 trillion won in operating profit, down from 3.09 trillion won a year earlier. (Yonhap)
