Seoul, South Korea (4E) – Samsung Electronics Co. reported fourth-quarter earnings growth that showed a sharp slowdown, prompting the company to forecast a weak first half.
Excluding minority interests, net income climbed 5.4 percent to 7.22tn won ($6.7bn) in the quarter ended Dec. 31, according to the Suwon, South Korea-based company in its filing Friday. The result is the slowest profit growth since falling in third quarter of 2011.
Operating profit dropped 6 percent from the previous year to 8.31tn won, the first drop in two years.
Asia’s largest technology firm is faced with pressure on its profit margins as new devices from Apple, Lenovo Group Ltd. and Huawei Technologies Co. hold back growth of Samsung’s Galaxy devices.
Currency movements reduced company’s earnings by 700bn won, and the company paid bonuses to workers and increased marketing spending as it prepares for the launch of its new S5 high-end device aimed to compete with the iPhone.
Cellphones and telecom equipment account for 66 percent of Samsung’s operating profit during the quarter. While the mobile business contributed to more than half of the company’s profits in the last two years, margins is faced with more pressure in 2013 as the firm boosted marketing costs and sold more lower-margin smartphones devices.