Samsung is the largest smartphone maker in the world, but the Korean company has been struggling to recover from a downwards spiral crisis that has been raging it for the past 5 quarters in a row. Samsung makes great flagship phones and very good mid-range handsets, but sales have been doing slow, especially on the high-end segment where profits are bigger, and the company has been facing heavy competition on every front you can think of – Apple, Xiaomi, Lenovo, Huawei, ZTE and many others. Although the company is still making a decent revenue, its profits have been falling quarter after quarter thanks to increasing marketing and other expenses and lowering selling prices of some of its products.
Earlier last week, business analysts from several agencies reduced the fourth quarter profit forecast for the company by around 4%, from $6.01 billion to $5.76 billion, a $253.91 million drop. Still, the new predicted result will be around 22% higher than last year’s same period, which closed at $4.7 billion, a 37% drop from Q4 2013. Today a new report from Business Korea brings more bad news for Samsung, as analysts have further reduced the company’s profit forecast for Q4 2015 by almost half a billion dollars. The word out there is that Samsung will have a $5.27 billion profit, but there are worse predictions saying it can get as low as $5.1 billion, almost a billion short from what originally predicted.One of the reasons for this drop is the fact that the semiconductor business, which has been serving as Samsung’s “cash cow” division, is facing a slowdown in sales, which combined with poor smartphone sales will result in a significant profit drop.
One of the reasons for this drop is the fact that the semiconductor business, which has been serving as Samsung’s “cash cow” division, is facing a slowdown in sales, which combined with poor smartphone sales will result in a significant profit drop. To add up to the problem, their display division is also facing sluggish sales, PC demand is falling, and their components business is also doing slow. For the next quarter, the expectations are also low. Analysts predict that Samsung will have a very slow profit growth for Q1 2016, with numbers closing in around 5.24 billion dollars or 6.16 trillion won (South Korean currency), a mere 3.1 percent increase year-over-year.