Samsung forecasts 18pc drop in quarterly profits


Analysts have speculated staff bonuses and unexpectedly high smartphone marketing expenses are behind the drop in profits for Q4

Samsung has forecast an 18 per cent drop in operating profit for the forth quarter of 2013 (October, November, December).

According to guidance published by the company today (January 7) operating profit for the last three months of 2013 will be about 8.3 trillion won (£4.7 billion).

This is in comparison to the 10.16 trillion won (£5.8 billion) operating profit recorded for the third quarter (July, August, September).

Sales for Q4 are expected to total 59 trillion won (£33.6 billion), down slightly from 59.08 trillion won (£33.7 billion) in the previous quarter.

Samsung will discuss its Q4 results in greater detail on January 24.

Analysts have pointed out that the company gave away an estimated 300 billion to 700 billion won (£171 million to £400 million) in staff bonuses during the quarter to mark the 20th anniversary of Chairman Lee Kun-hee’s ‘New Management’ strategy.

They also speculated that marketing costs for Samsung’s smartphone division may have been larger than expected.