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Samsung Electronics has forecast a 60% fall in quarterly operating profit from a year ago because of slowing Galaxy smartphone sales.
The world's biggest mobile phones and TV maker said it expects an operating income of 4.1tn won ($3.8bn; ?2.5bn) for the three months to September.
That is below analysts' expectations for earnings of 5.2tn won.
The South Korean company will publish full financial results later this month.
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Smartphone shipments increased marginally amid intense competition?
Samsung Electronics
Samsung's mobile division, its biggest business, has been struggling to maintain its dominance against rivals such as Apple and Chinese smartphone-makers Xiaomi and Lenovo.
Its flagship Galaxy smartphone line has been losing market share to cheaper models that also have large screens and multiple features.
The firm said quarterly sales amounted to 47tn won, which was below analyst estimates for 50.3tn won.
"Smartphone shipments increased marginally amid intense competition," Samsung said in a statement.
"However, the operating margin declined due to increased marketing expenditure and lowered average selling price."
The company also said it is "preparing new smartphone line-ups featuring new materials and innovative designs, as well as a series of new mid-to-low end smartphones".
Samsung shares rose about 1.6% in Seoul despite the weak profit outlook.
The world's biggest mobile phones and TV maker said it expects an operating income of 4.1tn won ($3.8bn; ?2.5bn) for the three months to September.
That is below analysts' expectations for earnings of 5.2tn won.
The South Korean company will publish full financial results later this month.
Continue reading the main story
?Start Quote
Smartphone shipments increased marginally amid intense competition?
Samsung Electronics
Samsung's mobile division, its biggest business, has been struggling to maintain its dominance against rivals such as Apple and Chinese smartphone-makers Xiaomi and Lenovo.
Its flagship Galaxy smartphone line has been losing market share to cheaper models that also have large screens and multiple features.
The firm said quarterly sales amounted to 47tn won, which was below analyst estimates for 50.3tn won.
"Smartphone shipments increased marginally amid intense competition," Samsung said in a statement.
"However, the operating margin declined due to increased marketing expenditure and lowered average selling price."
The company also said it is "preparing new smartphone line-ups featuring new materials and innovative designs, as well as a series of new mid-to-low end smartphones".
Samsung shares rose about 1.6% in Seoul despite the weak profit outlook.