Samsung Electronics on Tuesday, Oct 7, flagged a near 60 percent on-year plunge in its third quarter operating profit, as its key smartphone sector continued to struggle in the face of increased competition.
Operating profit for the July-September period was estimated at 4.1 trillion won ($3.8 billion), down 59.6 percent from the third quarter last year, the company said, according to the Associated Press.
Sales were estimated at 47 trillion won, down 20.4 percent from 2013.
While smartphone shipments increased slightly, "operating margin declined due to increased marketing expenditures and a lowered average selling price, driven by reduced proportional shipments of high-end models coupled with price decreases for older smartphone models", the South Korean electronics giant said in an explanatory note.
The company warned that uncertainty in the mobile sector would carry through into the fourth quarter, although it promised a new line-up of top-end smartphones featuring "new materials and innovative designs".
In July, Samsung had reported a 20 percent drop in net profit for the second quarter, and its shares are sitting at a two-year low.
The explanatory note, according to the AP, said shipments and profits in the company's display panel business had also fallen in the third quarter due to weaker demand in the mobile sector.
It did not provide a breakdown of profit estimates by businesses.
According to International Data Corp., a record-high 295.3 million smartphones were shipped worldwide in the second quarter.
Samsung remained the world's top vendor, moving 74 million handsets, but saw its overall market share slip seven percentage points to 25.2 percent, while China's Huawei nearly doubled its shipments from the same quarter a year ago.
Samsung said Tuesday it would bring out a new series of mid- to low-end smartphones in the fourth quarter "with strong competitive positioning on both hardware specifications and price".
Last month, Samsung brought forward the launch of its oversized Galaxy Note 4 smartphone and got it into Chinese and South Korean stores ahead of its sale in 140 other countries.
It was the first time a flagship Samsung product had gone on sale in China ahead of other markets.
