Samsung's Q4 profit declines on soft smartphone demand

Samsung Electronics, the world's largest smartphone maker, posted its first profit slump in five quarters as soft demand for smartphones dampened the company's Galaxy device sales and lowered prices of components such as chips and display panels.

Operating profit was 6.14 trillion won (5.08 billion U.S. dollars) during the October-December period, down 16.92 percent from 7.39 trillion won in the previous three months, a regulatory filing showed Thursday.

After bottoming out at 4.06 trillion won in the third quarter of 2014, Samsung's operating profit continued to rise to 7.39 trillion won in the third quarter of 2015. But, it slumped to 6.14 trillion won in the next quarter, registering the first fall in five quarters.

Most of manufacturers suffered from weaker demand for smartphones due to saturation of the market and stiffer competition among traditional rivals and newcomers. It resulted in lower price of semiconductors and flat screens, contributing to Samsung's profit slump.

Revenue was 53.32 trillion won in the three months through December, up 3.16 percent from 51.68 trillion won in the third quarter. But, net income tumbled from 5.46 trillion won to 3.22 trillion won in the fourth quarter.

Samsung said that unfavorable foreign exchange rates caused a currency loss of about 400 billion won during the quarter. The company gained some 800 billion won from favorable currency moves in the previous quarter. Endit