Samsung's profit growth stumbles in quarter

Samsung Electronics posted its first profit decline in nine quarters as Apple's newest iPhones won high-end handset sales and competition from cheaper brands crimped prices.

Operating profit was 8.3 trillion won (HK$60.5 billion) in the fourth quarter of last year, the South Korean company said yesterday. That compares with profit of 9 trillion won a year earlier.

Sales of devices such as Samsung's flagship Galaxy S4 smartphone have slowed following the release of the iPhone 5s and 5c and competition from Chinese makers selling smartphones for as low as US$100.

The trend hit prices for Samsung's panels and crimped display-unit earnings as the company ramped up spending on employee bonuses and promotions for the Christmas shopping season.

"The one-time costs, such as bonus payouts, were bigger than what had been estimated," said Jae Lee, an analyst at Daiwa Securities. "There isn't a real driver in the first quarter, with not many new products lined up to show solid profit."

Samsung paid a special bonus of 700 billion won to workers in the quarter, Shawn Kim, an analyst at Morgan Stanley, said in a report.

Analysts had expected Samsung to post operating profit of 10 trillion won. The decline was the first since the third quarter of 2011.