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Samsung Finds It Costly to Keep Up With China

We were warned. Samsung Electronics is facing tougher competition in the No. 1 market for smartphones—China—and has made it clear that no one should expect much from its latest quarterly results. The world’s largest maker of smartphones expected earnings to be “not that good,” Chief Financial Officer Lee Sang Hoon said last month. With that sort of downbeat news coming out of Suwon, South Korea, analysts responded by cutting their estimates. At least 25 downwardly revised their takes on what Samsung’s earnings would be for the quarter.

The results were worse than many expected. Operating profit fell about 24 percent to 7.2 trillion won ($7.1 billion) for the quarter, the third consecutive quarter of declining profits for the Korean electronics giant, on sales of about 52 trillion won. An average of 34 estimates compiled by Bloomberg had placed the company’s operating profit at 8.1 trillion won and sales at 53.2 trillion won.