Samsung building

Samsung To Face A 37% Q4 2014 Profit Drop, Compared To Q4 2013 Results

January 8, 2015 - Written By Kristijan Lucic

Samsung was at the top of their game for a long time. This Korea-based company is still world’s number one smartphone manufacturer, but they won’t remember 2014 for good financial results though. The company’s profits took a dive in 2014, basically everywhere in the world except the U.S., Samsung had to deal with a 50% profit dip in China for example, those were Q3 results if I remember correctly. The company is doing everything they can in order to bring their mobile business back on track they even altered the design of their devices and started using metal as the build material along with plastic.

It seems like Q4 2014 financial report won’t be that good for Samsung either. Samsung Electronics expects to see some decline in their fourth-quarter earnings reports due to the increasing competition. This South Korean giant expects its operating profit for the quarter to be 5.2 trillion won ($4.7 billion), which is a 37% drop compared to the same quarter in 2013. The company also expects its sales for Q4 to fall about 12% year over year, to 52 trillion won, which equals to $47 billion. This will be Samsung’s fifth consecutive quarter of declining operating profit, which are really poor results for the company, though this was to be expected. Xiaomi and Huawei are creating a lot of competition for Samsung in Asia, where Samsung sold a ton of their devices in the previous years. This Korean company just can’t (or won’t) match the pricing some other companies provide, Samsung really has to re-think their strategy in order to fight back.

Samsung’s global smartphone share shrank in Q3 from 31.1% to 24.4 year over year and you can expect that percentage to go even lower in Q4. Samsung also promised that they’ll reduce the amount of sub-brands they push out to the market, though we don’t see the improvement in that department just yet. Samsung is a huge corporation though, I don’t doubt they’ll come back stronger than ever, they just need to alter their strategy to some extent and de-bloat their Android skin, at least in my humble opinion. What are your thoughts on this?