Samsung Electronics Forecasts First Annual Profit Drop in 3 Years

Samsung Electronics said Thursday its annual profit fell for the first time in three years as its smartphone growth lost steam. The company's 2014 operating profit is expected to be about 24.9 trillion won ($22.6 billion), down 32% from 2013, based on preliminary figures. It will release its full financial results including net profit and a breakdown of business divisions later this month. For the fourth quarter of last year, Samsung said operating profit was about 5.2 trillion won ($4.7 billion), down 37% from a year earlier. The result was still higher than analyst expectations of 4.9 trillion won according to FactSet, a financial data provider, due to robust demand for memory chips. Analysts said Samsung's smartphone business, which contributed two-thirds of its profit in the last two years, continued to struggle but improvements in its semiconductor division helped the company rebound from the third quarter, its worst quarter in nearly three years. 'It's time to see Samsung as a semiconductor company,' said Lee Sei-cheol, an analyst at Woori Investment & Securities. Quarterly sales dropped 12% to 52 trillion won, in line with the expectations of analysts. Samsung’s semiconductor division, which develops memory chips, mobile processors and solid state drives, will generate more profit than Samsung's Galaxy phone sales this year, according to Lee and other analysts.