Samsung’s earnings estimate for Q3 2014 hints at a 60 percent drop in operating profit
Samsung has released its earnings estimate for Q3 2014 and it doesn’t good at all. Samsung is estimating a 60 percent drop in its operating profit for the last quarter when compared to Q3 2013. According to K-IFRS, Samsung has a consolidated sales of around 47 trillion Korean won with a consolidated operating profit of 4.1 trillion won which is lower than the operating profit from Q2 2014. These figures are just estimates and Samsung is expected to reveal actual numbers in the last week of October. A major reason behind its waning profit is due to declining smartphone sales. Samsung’s smartphone sales are getting squeezed by Apple in the high-end segment while the Chinese vendors are competing fiercely with Samsung in the entry-level smartphone segment.
Due to this slowdown, Samsung is investing in chip manufacturing and has managed to bag a deal from Apple to provide them with next-generation chips based on 14nm process. Recently, Samsung announced its plan to invest around $14.7 billion on a new semiconductor plant in South Korea.