Samsung on Monday night issued a statement warning that its third-quarter earnings would be considerably weaker than it initially expected. The South Korean company stated that it expects a third quarter operating profit of 4.1 trillion won, or $3.8 billion, and sales of 47 trillion won. Both of these numbers are below Reuters’ forecasts of 5.6 trillion won in operating profit and 50.9 trillion in sales (via CNBC).
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Samsung blames its weak Q3 performance on lower average selling prices of its smartphones. Samsung issued a similar warning last quarter, blaming its fall in profits then on stronger competition from lower-end device manufacturers like Xiaomi. Samsung said that its overall smartphone shipments were up from the year ago quarter, but the lower average selling price is what’s causing the decline in profits.
Samsung says that it expects its mobile uncertainty to continue into the fourth quarter of 2014. Its struggles will only certainly be enhanced by Apple’s latest mobile offerings, the iPhone 6 and iPhone 6 Plus. Despite various launch issues, both of the company’s new devices received very positive reviews and set opening weekend sales records.
Samsung is expected to release its full third quarter earnings report around the end of October. Despite this evening’s warnings, Samsung’s shares rallied 1% at the open in Seoul.