Samsung: Ta-da! We made $7.8bn. What do you mean you expected another BILLION?
Firm misses the hell out of estimates as mobe sales drop
Samsung Electronics has missed analysts' estimates of its operating profit for the fourth quarter of last year, after a one-off special bonus for employees and slowing demand for high-end smartphones.
The company said that its guidance ahead of the full results on January 24 put operating profit at 8.3 trillion won ($7.8bn, £4.76bn), down 18 per cent from the previous quarter's record earnings and six per cent less than the profit for the same quarter in the previous year.
Analysts had expected lower profits, but the figure is a whopping 1.45 trillion won ($1.35bn, £828m) below Thomson Reuters' Starmine SmartEstimate, made up of the forecast of 23 analysts, which came out at 9.75 trillion won ($9.24bn, £5.64bn).
Profits were expected to be hit partially because of a special bonus for the 20th anniversary of the "New Management" plan of Chairman Lee Kun-hee, which has been estimated at between 300bn and 700bn won on special incentive payments to workers. There are also fears that the slowing smartphone sector is hitting both Samsung's Galaxy line-up and its business supplying displays and chips for rivals like Apple.
On top of that, investors are worried about the won currency's strengthening position against the dollar, which will hit Sammy's export earnings. Shares have fallen by ten per cent in the last month, wiping a hefty $19bn off the company's market value. ®