Plunging smartphone sales bring down the profits to a three-year low.
Samsung Electronics is expecting a 60% drop in its operating profits during the third quarter of 2014, in the midst of sluggish sales of Galaxy smartphone range, including the recently launched Galaxy S5.
The South Korean electronics maker is expecting an operating income of $3.8bn for the quarter ending September, marking the company’s weakest quarterly profit since Q2, 2011, and the fourth consecutive quarter with declining earnings on an annual basis.
Samsung said in a statement: ""Smartphone shipments increased marginally amid intense competition.
"However, the operating margin declined due to increased marketing expenditure and lowered average selling price."
The company said that it is preparing new smartphone line-ups featuring new materials and innovative designs, as well as a series of new mid-to-low end smartphones.
The company is expecting a rise in shipments of new smartphones and massive seasonal demand for TV products.
Recently, Samsung Electronics revealed plans to pour $14.7bn in a new semiconductor manufacturing plant in South Korea. The unit is expected to deliver more operating profit than its mobile unit during the quarter for the first time in over three years.
Samsung’s smartphone unit has been losing ground to Apple’s high-end devices, in addition to the entry of domestic phone makers into the mid-and-low cost markets.