Samsung shares dipped after the electronics issued a record fourth-quarter guidance that nonetheless failed to meet analysts’ expectations.
The South Korean vendor projected an operating profit of 15.1 trillion Korean Won ($14.13 billion) for the latest quarter, up roughly 64% year over year, but falling shy of the average of analysts’ estimates by $935 million, according to Bloomberg. Shares of the company fell slightly more than 3% on the news.
Mehdi Hosseini, senior analyst and senior vice president of semiconductors at Susquehanna Financial Group, said on CNBC’s “Squawk Box” that the miss was “primarily driven by smartphones,” CNBC reported. The company’s semiconductor and display businesses saw impressive performances, Hosseini said.
Samsung last month launched a research initiative, reorganizing its Software R&D division and Digital Media & Communications R&D center into a single entity. Samsung Research, as the new effort is called, will serve as a single R&D unit integrating the South Korean company’s consumer electronics, IT and mobile efforts. The division will operate 22 centers around the world with a total staff of 20,000 and will focus on areas such as artificial intelligence and the IoT.
That move highlighted Samsung’s ongoing—and difficult—effort in mobile to expand beyond hardware into software and services. Reuters reported two years ago that the company’s mobile business had largely failed to capitalize on opportunities in the mobile market due to leadership that struggled to move beyond the mindset of the devices themselves.
Samsung remains the world’s largest smartphone vendor, however, and in October it posted a record operating profit of $12.9 billion due primarily to sales of its semiconductors and display units.