Samsung posts profit decline amid weakened smartphone sales

Samsung Electronics Co. announced its first profit decline in nine quarters as the company reported today. At the same time, the newest iPhones of Apple Inc. became the best-selling high-end handsets.

Samsung announced in an official statement today that its operating profit was 8.3 trillion won (7.8 billion dollars) in the last trimester that ended in December 2013. This makes the profits of the company smaller than the one recorded a year earlier, which was estimated to 9 trillion won. Samsung explained today that the fourth-quarter sales were about 59 trillion won. There is a sales increase estimated to 5.3%, which is the slowest since the one posted during the third quarter of 2011. The company did not provide any information about its net income or divisional earnings.

Bloomberg has reported that the sales of Samsung Galaxy S4 have slowed amid the ones of Apples iPhone 5s and 5c. That is why Samsung, which is considered as the biggest smartphones and televisions manufacturer in the world is constantly trying to increase its sales by introducing some new designs such as curved screens and bendable displays. It became clear that a special bonus of 700 billion won was paid to the companys workers in the same quarter.

According to the average of 32 analyst estimates compiled by Bloomberg, Samsung Electronics Co. was expected to post an operating profit estimated to 10 trillion won. Now the company has posted its first operating profit decline since the third quarter of 2011.

Samsung also announced today it plans to release its first set of bendable screens on the market later this year. The company explained this is expected to be an innovative technology, thanks to which the customers will be given the opportunity to change the display from flat to curved by touching a button. Samsung Electronics Co. also becomes more focused on ultra-high definition screens. Such screens offer four times the resolution of conventional displays.

During the fourth quarter 91 million smartphones were shipped by Samsung Electronics, which is 4% more than the smartphones shipped in the previous quarter according to an estimate by KB Investment & Securities Co. One of the analysts working for Sanford C. Bernstein – Mark C. Newman said on this occasion: “Theres still a lot of upside ahead. Samsungs the actually only company in the world that is actually making money on low-end smartphones right now.”

However, Samsung is currently facing new but fierce competition on the Chinese market, which is known as the largest handset market in the world, dealing with China Mobile Ltd. Which is the biggest carrier by users.

According to Bloomberg, the current share price of Samsung Electronics Co. Ltd. is 0.23% down, and its one-year return rate is 14.18% down.