Currency fears may cut Samsung's profit $2.8 billion
Samsung Electronics Co. fell to a two-month low in Seoul trading after forecasting a slowdown in smartphone demand and predicting that a stronger currency may cut operating profit by $2.8 billion this year.
The world's largest maker of mobile phones, TVs and computer-memory chips dropped 2.5 percent after stoking concerns about the smartphone market triggered by an Apple Inc. share plunge Thursday. The forecast also overshadowed a better-than-expected 76 percent jump in quarterly net income.
"Fourth-quarter results were good, but the problem now is what lies ahead," said Kim Hyung Sik, a Seoul-based analyst with Taurus Investment Securities. "The high-end smartphone market has largely become saturated, while the fast Chinese growth in the lower segment will make it difficult for anyone to see strong profit growth there."
Samsung and Apple, which together make more than half the world's smartphones, face slower growth in developed nations as years of surging sales have limited the number of new customers they can find. In China, the companies are batting with local phone-makers offering models costing as little as $100.
"Chinese vendors are growing fast," Kim Hyun Joon, vice president at Samsung's mobile communications business, said on a conference call Friday. Global market growth also will get "somewhat weaker" starting this year, he said.