Samsung forecasts 25% drop in profit

Samsung Electronics has forecast a 25% drop in profit for the second quarter due to a slowdown in the smartphone market and a strong Korean currency.

It expects to make an operating profit of 7.2 trillion won ($7.1bn; £4.2bn) in the April-to-June period, down from 9.5 trillion won a year ago.

Its operating profit has now fallen for three straight quarters.

Samsung is the world’s biggest maker of mobile phones and the handset division accounts for the bulk of its profits.

The South Korean firm said it “witnessed a slowdown in the overall smartphone market growth and saw increased competition in the Chinese and some European markets” during the period.

Meanwhile, a stronger Korean currency also hurt Samsung’s earnings during the period.

The Korean won rose more than 11% against the US dollar and nearly 7% against the euro between July 2013 and end of June this year.

A strengthening currency hurts profits of firms such as Samsung – which rely heavily on exports – when they repatriate their foreign earnings.

Source-BBC