Samsung Electronics has forecast a 37.4% fall in quarterly operating profit from a year earlier.
In its pre-earnings guidance, the firm forecast an operating profit of 5.2tn Korean won ($4.74bn; £3.14bn) for the three months to December.
Analysts had expected an operating profit guidance of about 5tn won.
Shares in the firm, which is the world's largest TV and mobile manufacturer, were up in early morning trade in South Korea on the news.
The firm's final fourth-quarter earnings are expected later this month.
“Samsung's new models are basically an improvement of existing products, but they pride themselves on being innovative, so they really have to start focusing on that to stay in the game”
Andrew Milroy, Frost & Sullivan
Samsung has been struggling of late against cheaper electronics manufactures, especially in China, which is the world's largest smartphone market.
In particular, its flagship Galaxy smartphone line has been losing market share to cheaper models.
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