Samsung issues profits warning for Q214

Samsung has issued a sharp profits warning, and is forecasting that its second quarter profits will be badly hurt by a slowdown in smartphone sales, and local currency problems.

The company warned that its underlying operating profit is likely to fall by a quarter, to KRW7.2 trillion (US$7.1 billion) for the three months to the end of June.

That marks the third consecutive quarter of operating profit declines, but the size of the latest forecast has alarmed investors.

Although the company said that declining smartphone sales in an increasingly saturated and competitive market was in part to blame, it was also hurt by a strong South Korean currency that reduces the value of its profits from overseas.

The Korean currency has risen by more than 11 per cent against the US dollar and nearly seven per cent against the euro over the past year.