Samsung Sinks on Growth Concerns
Shares of Samsung (OTCMKTS:SSNLF) tumbled on this Tuesday’s session as the technology company reported a lackluster first quarter. The company reported an operating profit of 8.3 trillion won, or $7.8 billion, in the three months ended December. These results aren’t great when considering year over year comparable. Samsung reported an operating profit of 9 trillion won a year earlier.
Sales of Samsung’s Galaxy S4 have slowed amid competition from the iPhone 5s and 5c, Apple’s (NASDAQ:AAPL) new lower cost smartphone. Fourth-quarter sales came in at 59 trillion won, an increase of 5.3 percent. Samsung shipped 13 million units of its S4 in the fourth quarter, down from 17 million in the previous three months.
Operating profit at the mobile unit, the Samsung’s biggest contributor to earnings, was 6.4 trillion won. Operating profit at Samsung’s consumer-electronics division, think TV and home-appliance businesses, fell to 418 billion won from 700 billion won a year earlier, according to an analyst survey issued by Bloomberg.
In the coming weeks we should have more information regarding the quarter. Samsung announced that its audited results will be published later in the month. At that time, we will likely see more analyst commentary into the specifics. The global smartphone war is heating up already.
2014 may be the year we see Apple regain traction in the market. Apple’s new 5c model line has reportedly taken market share away from the lower end manufacturers. As a result, Samsung appears to be in the direct line of fire. The battle to gain control of the emerging markets segment will continue to weigh on the minds of investors. As a result of the poor performance, Samsung shares traded to the downside by 5% on the session.
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