Profits drop announced by Samsung

<p>Profits are down at Samsung, the firm has announced.</p>

Samsung has announced a quarterly drop in its profits, but the share price of the electronics company was still up on the back of the news today (January 24th).

The firm revealed in a statement that its profit for the October to December period was 7.3tn won (£4 billion), which was down 11 per cent from the previous three months.

Operating income was revealed to have dropped by 18 per cent quarter-on-quarter and the company stated that its mobile phone division had not performed as well as expected.

Samsung's main rival in this sector is Apple, which launched two new smartphones – the iPhone 5S and the iPhone 5C – on to the market in the last 12 months.

2014 forecast

In the statement, Robert Yi, the firm's head of investor relations, stated that Samsung is expecting 2014 to follow a similar pattern as the one seen in the last 12 months – a weaker first half of the year followed by improved performance in the second half.

Record annual earnings were posted by the firm despite the quarterly drop in profits and Samsung announced that it made a net profit of 30.5 trillion won in 2013, which was a 28 per cent jump from a year ago.

Smartphones, tablets and TVs are among the most popular products made by Samsung, which has secured its place as one of the electronics sector's most dominant firms in recent years.

Indeed, Samsung stated that it now has 30 per cent of the smartphone market around the world, indicating the strong success of the Android operating system its phones use. Smart TVs also look set to be a good area of growth for the firm in the coming years.

The Samsung Galaxy S4 is its latest release in this sector and some analysts had stated that sales of the device were not living up to expectations initially.

Following the release of the company's latest financial results, its share price rose by 0.62 per cent in Korea during the day's trading.

Learn about the Asian markets and CFD trading at City Index

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.