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Samsung expects profits to fall even further

The last 12 months have been ones that Samsung would very much like to forget, but it seems that the South Korean company’s run of poor earning has continued into 2015 with the latest news that it is expecting a fifth straight fall in quarterly operating profit.

The earnings guidance from Samsung comes ahead of its full earnings report which will be released later this month and predicts profits of 5.2 trillion won (around $4.7 billion or R55 billion) which is just above the 4.8 trillion won that was expected by analysts.

Samsung’s mobile business is the biggest cause of the drop in profits – it normally contributes north of 60% of the entire operating profit of the company. With Samsung’s smartphone sales bottoming out last year and with pressure on most of its market segment, the company’s profits look to have been hit so hard that even the lucrative festive shopping season couldn’t pull them out of the doldrums.

2015 will be a definitive year for Samsung with the expected launch of the Galaxy S6 at Mobile World Congress at the beginning of March set to be a great barometer for the company’s potential success, or failure, over the course of the year. While last year’s Galaxy S5 failed to slow the slide of Samsung, a potentially new all-metal frame and design could reignite Samsung and put its fortunes back on track.

We already know that the company will be making less models of phones with a greater focus on using more of its own components and sharing as many of them as possible across its products to maximise the profits in the year to come.

Whether or not that will be effective in getting the mobile division back on the path to increased profitability is impossible to tell, but we really do hope that Samsung is able to stage a comeback as it would be sad to watch the company that made Android a household name disappear from the mobile landscape the way some other companies have.

[Source – Bloomberg, Via – Cnet]

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