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Samsung Sees Q4 Earnings Dip, Predicts a Tough 2016 for Mobile Devices

The company says it hopes to grow smartphone shipments this year despite slumping demand and increased competition.

The Verge

Korea’s Samsung Electronics said woes in the global economy and weak prices for components caused its earnings to fall in the usually strong fourth quarter.

For the three months ended Dec. 31, the company earned 6.14 trillion Korean won ($4.4 billion) in operating profits on revenue of 53.32 trillion won ($50.8 billion), which roughly matched the results Samsung had forecast.

Fourth-quarter smartphone shipments were down as the company aimed to manage inventory, while its tablet shipments rose amid the seasonal bump in demand.

Meanwhile, the company said increased competition mixed with slumping demand will limit growth in its mobile devices unit for 2016.

“As for the outlook for 2016, Samsung expects single-digit percentage growth in both the smartphone and tablet categories amid softening demand and intensifying competition,” Samsung said in a statement. “Despite this challenging environment, the company will focus on increasing smartphone shipments and maintaining a double-digit margin through releases of competitive devices and an optimized product portfolio.”

Tablets and wearables, meanwhile, should make up a growing amount of the mobile unit’s business, Samsung said.

As for Samsung’s other electronics businesses:

  • The semiconductor business saw a tough fourth quarter as weak PC demand impacted memory chip sales.
  • The display unit declined from the prior quarter, with both a continued decrease in average selling prices and a drop in the number of large-size panels sold.
  • The TV and home appliance business had a good holiday quarter with increased sales of high-end 4K televisions.

Correction: An earlier version of this story included incorrect U.S. dollar conversions of Samsung’s earnings and revenue figures.

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