October 07, 2014

Samsung Electronics Pre-Earnings Guidance (2014.3Q)

On October 7, 2014, Samsung Electronics disclosed its earnings guidance for the third quarter, 2014.
 Consolidated Sales: Approximately 47 trillion Korean won
 Consolidated Operating Profit: Approximately 4.1 trillion Korean won
The above figures are consolidated earnings estimates based on K-IFRS. Korean disclosure
regulations do not allow earnings estimates to be provided as a range. Therefore, the above figures are
based on the median of the earnings estimate range, as given below.
 Sales: 46 ~ 48 trillion Korean won
 Operating Profit: 3.9 ~ 4.3 trillion Korean won
「2014 3Q Pre-Earnings Guidance Explanation」
In light of lower earnings guidance reported compared to the earlier market expectation, the purpose
of the information contained below is to provide a brief explanation on the preliminary 3Q earnings
forecast to improve investors’ understandings and mitigate the market uncertainties prior to the
Company’s official announcement of the quarterly earnings results.
I. 3Q Earnings Guidance
Samsung Electronics' 3Q earnings is expected to decrease substantially quarter-on-quarter as a result
of declines in the mobile business due to intensified smartphone competition, which also had an
adverse effect on the performance of the OLED and S.LSI businesses, and weak seasonal demand for
the CE business, including TVs.
1) Mobile Business
Smartphone shipments increased marginally amid intense competition. However, the operating
margin declined due to marketing expenses related to aggressive promotions and lowered ASP
(Average Selling Price) driven by reduced proportional shipments of high-end models coupled with
price decreases for older smartphone models.
2) CE Business
Under typically weak seasonality, earnings for the CE business declined substantially quarter-onquarter
due to reduced ASP of TVs and an earlier-than-expected end to the peak summer sales season
of home appliance products, such as air conditioners.
3) Memory Business
Earnings for the Memory business improved on-quarter led by continued strong seasonal demand
momentum, including PCs and servers, price stabilization under tight market supply and demand
conditions, and cost reduction thanks to improved process migration.

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