Samsung profit down 72%

April 24, 2017

The world’s second largest handset maker, Samsung Electronics, today posted a first quarter profit of 619.20 billion won (£316 million), down 72% on year as consumer demand was squeezed by the global recession.

The result improves on the fourth quarter of 2016, when Samsung posted its first ever quarterly loss.

This fall in profit came despite Samsung’s handset division outperforming Nokia, LG, and Sony Ericsson.

Samsung’s handset division posted a profit margin of 11%, higher than Nokia’s 10.4%, LG’s 6.7%, and Sony Ericsson’s loss.

Robert Ki, vice president, said a weak global economy and increased competition will put pressure on profits this year.

A statement released by the company recognised its ’strong recovery from the fourth quarter’ and pointed out that semiconductor prices have stabilised, and profit margins for mobile phones have increased.

“The global economy is likely to continue to recover in the second quarter but lingering uncertainty means it is difficult to predict a sharp improvement in demand or the business environment in the near term,” Ki added.

Samsung’s share price dropped 5.6% following the announcement.