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Samsung Q4 profit down 5.95 pct on bonuses, foreign exchange

All Headlines 09:01 January 24, 2014

By Kang Yoon-seung

SEOUL, Jan. 24 (Yonhap) -- Samsung Electronics Co., the world's top maker of smartphones, said Friday its fourth-quarter operating profit fell 5.95 percent from a year earlier.

Operating profit came to 8.31 trillion won (US$7.73 billion) in the October-December period, compared with 8.84 trillion won a year earlier, the company said in a regulatory filing.

Sales edged up 5.74 percent on-year to 59.28 trillion won, the company added. The figures were in line with Samsung's guidance released earlier this month.

Analysts attributed Samsung's weak operating profit to its massive bonuses paid out to its employees last year to commemorate the 20th anniversary of its so-called New Management Initiative, Samsung's key business strategy.

The rising Korean won against other currencies also weighed down on the performance, inflicting foreign-exchange losses and making Samsung less price-competitive in the global market.

The increased marketing costs amid stiffer competition with rivals at home and abroad also limited Samsung's earnings, analysts added.

For all of 2013, Samsung logged an operating income of 36.79 trillion won, up 26.63 percent from a year earlier, with sales also advancing 13.72 percent to 228.6 trillion won.

Shares of Samsung closed at 1,299,000 won on the Seoul bourse Thursday, slipping 2.18 percent from the previous session's close. The quarterly results were announced before the stock market opened Friday.


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