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Samsung Expects Record Profit, But …

The company's streak could be nearing the finish line


Samsung is expecting a record profit of $25 billion this year after posting a record quarterly profit of $7.3 billion in Q3 — nearly double year-over-year.

Analysts, though, expect the company’s streak of four consecutive record quarters to come to a screeching halt next quarter — and then to decline until the second quarter of next year.

Some headwinds include higher performance payouts for employees, around $1 billion in legal damages to rival (and customer) Apple (NASDAQ:AAPL) and a crowded smartphone market.

The company is also increasing its marketing in the face of its competitor’s new must-have iPhone 5, despite having already spent billions so far this year.

Still, the company has enjoyed solid sales of high-end TVs and Galaxy smartphones, allowing it to boom even as Apple reduced order for chips and screens.

In Q3,  the company’s mobile division more-than-doubled to around two thirds of total profit, while smartphone shipments topped 58 million.

Next year, Samsung is planning to scale back its chip investment because of such falling demand.

Article printed from InvestorPlace Media,

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