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© bellemedia dreamstime.com Electronics Production | October 07, 2014

Samsung expects 3Q earnings to decrease

The Korean tech-giant has released its earnings guidance for Q3 2014, and it is a lower guidance than the one previously reported.
Samsung Electronics' 3Q earnings is expected to decrease substantially quarter-on-quarter as a result of declines in the mobile business due to intensified smartphone competition, which also had an adverse effect on the performance of the OLED and S.LSI businesses, and weak seasonal demand for the CE business, including TVs.

Smartphone shipments increased marginally amid intense competition. However, the operating margin declined due to marketing expenses related to aggressive promotions and lowered ASP (Average Selling Price) driven by reduced proportional shipments of high-end models coupled with price decreases for older smartphone models.

Earnings for the Memory business improved on-quarter led by continued strong seasonal demand momentum, including PCs and servers, price stabilization under tight market supply and demand conditions, and cost reduction thanks to improved process migration.

The company is expecting sales of approximately KRW 46 – 48 trillion (USD 43 – 45 billion), and an operating profit of KRW 3.9 – 4.3 trillion (USD 3.6 – 4 billion).

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