Samsung Electronics Co showed a sharp drop in net profit for the fourth quarter, following slumps in sales of its own smartphones, and of those it supplies chips for.
Net profit was 3.2 trillion won (2.7 billion dollars) for the three months from October to December, down almost 40 % from the same period a year earlier, the company announced.
The figure fell short of a compilation of estimates by financial news agency Bloomberg, which anticipated an average 5.4 trillion won in net income. “Facing global economic headwinds, including a sharp fall in oil prices, the company’s fourth quarter earnings fell,” Samsung said. “The components side of the business was impacted by weakened prices for DRAM chips and LCD panels due to overall softer demand in the IT market and PCs.” Slackening demand for new smartphones hit sales of Samsung’s flagship Galaxy range, as well as those of other manufacturers who source their computer chips from the company.
Sales were up a modest 1.1 % year-on-year to 53.3 trillion won in the quarter, and operating profit was up 16.1 % to 6.14 trillion won. For the 2015 year, net profit lost 18.5 % to 19 trillion won, while sales dropped 2.7 % to 200.6 trillion won. Operating profit was 26.4 trillion won, up 5.55 %.
The strengthening of the won’s exchange rate also hurt profitability, the company said. A strong currency makes goods more expensive abroad and weakens repatriated earnings. (QNA)
