Samsung is expecting a decline in profits for the third consecutive quarter

Samsung Electronics is expecting a drop in its operating profit for the third consecutive quarter, citing an overall slowdown in smartphone market growth and increased competition in China and some European markets. The company was also hit in the second quarter by the appreciation of the Korean won against the U.S. dollar, the euro and most emerging markets currencies, it said Tuesday in an earnings guidance. The South Korean smartphones and tablets maker expects its operating profit to fall to between 7.0 and 7.4 trillion won (US$7.3 billion) from 9.53 trillion won in the second quarter last year. The company’s sales are forecast to be in the range of 51 to 53 trillion won, down from 57.46 trillion won in the same quarter last year. Samsung said tablet sales were sluggish because they have a longer replacement cycle than that of smartphones. Higher shipments of 5-to-6 inch large screen smartphones replaced demand for 7-to-8 inch tablets, it added. Sluggish sales of smartphones also affected the company’s semiconductor and display business. The company saw increased inventory in medium and low-end smartphones on account of competition in China and Europe. Inventory also rose because of a weaker demand for 3G products ahead of an expected growth of demand for 4G LTE products in the Chinese market.