Samsungs Profits Plummet as Smartphone Business Weakens

Samsung-LogoSamsung reported its first annual earnings decline in three years, largely pulled down by its weak mobile business, with Apple closing the gap in terms of smartphone shipments.

The companys fourth quarter operating profit was in line with guidance issued earlier this month, at ?5.3 trillion (£3.2bn), putting the annual profit at ?25 trillion, down from last years record ?36.8 trillion, and the lowest result since 2011.

Annual mobile sales brought in just ?107.4 trillion, a 21 per cent drop year-on-year, as pressure from both cheap smartphones at the bottom of the market and Apples new iPhones at the top squeezed Samsungs share tighter than ever.

The companys semiconductor chip business was the lone high point, with a 6 per cent year-on-year increase in revenues, bringing in ?39.7 trillion. While a healthy demand for chips helped lift earnings overall from the previous quarter, it wasnt enough to save the companys annual results.

“Uncertainties for global business conditions will likely grow further in 2015 due to the slowing Eurozone economy and financial risks in emerging countries,” said a Samsung spokesperson in a statement, clearly not forecasting a swift turnaround for the troubled company.