AKIPRESS.COM - Samsung Electronics Co. said Thursday its quarterly earnings dropped smaller-than-expected 27 percent in the fourth quarter but its forecast-beating profit could not mask that it was losing the battle of the big phones with Apple Inc.

The company beat forecasts not because of a fundamental improvement in its mobile phone business, but mainly thanks to solid performance of component businesses, such as memory chips and display panels.

Samsung said its sales of the Galaxy Note 4, its flagship big-size smartphone measuring 5.7 inches diagonally, increased from the third quarter. But said its overall smartphone sales during the quarter were between 72.2 million units and 75.1 million units, confirming analysts' forecast that Apple, at its record-high 74.5 million sales of iPhones during the same quarter, has narrowed its smartphones shipments gap with Samsung.

Samsung, the world's top smartphone maker, said that its October-December earnings were 5.3 trillion won ($4.9 billion), compared with 7.3 trillion won a year earlier.

Samsung's quarterly net income has dropped over a year earlier for four straight quarters. But the bottom line was a moderate recovery from the previous quarter's 4.2 trillion won and higher than analysts' forecasts of 4.4 trillion won, according to financial data provider FactSet.

Sales fell 11 percent to 52.7 trillion won from a year earlier while operating profit slumped 36 percent to 5.3 trillion won, in line with Samsung's preview earlier this month.