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Samsung profit drops for first time in over two years

  • Samsung (SSNLF) suffered its first fall in profits in nine quarters in Q4, with the company's operating income dropping to a provisional 8.1-8.5T won ($7.6-8B) from 8.84T won a year earlier and missing consensus of 10T won.
  • Revenue increased 5.3% to 58-60T won from 56.1T won but undershot forecasts of 61.5T and represented the slowest growth since 2011.
  • The decline in profits comes amid stiff competition at the high and low ends of the smartphone market, and after greater-than-expected bonus payments to workers.
  • Samsung's full results are due out on January 24.
  • Shares dropped 0.2% in Seoul. (PR)
Comments (7)
  • Book value
    , contributor
    Comments (72) | Send Message
     
    "The decline in profits comes amid stiff competition at the high and low ends of the smartphone market, and after greater-than-expected bonus payments to workers."

     

    iPhone 5s and 5c are dominating so Samsung had to bite the dust at high end.
    7 Jan, 02:34 AM Reply Like
  • keentolearn
    , contributor
    Comments (128) | Send Message
     
    iPhone 5s and 5c are dominating so Samsung had to bite the dust at high end.
    iphone 5c is already a flop show and profits are declining not because of iphones but Nexus.
    7 Jan, 04:50 AM Reply Like
  • Book value
    , contributor
    Comments (72) | Send Message
     
    iPhone 5c is far from a flop. In my estimates it sold about 15M units last Q which is probably more than Google has been able to sell Nexus. Nexus has been a flop since day 1.
    7 Jan, 07:46 AM Reply Like
  • Victor Liang
    , contributor
    Comments (173) | Send Message
     
    This is actually quite predictable because Samsung's enormous smartphone growth in the past few years were in a way misleading. Samsung does not report smartphone sales growth in different mobile phones (e.g. Samsung S3, Samsung note, and many other low-end phones).

     

    The company combines its sales of low-end and high-end phones because it does not want to reveal that "most of its growth actually comes from its low-end phones." This is different from Apple. All of Apple's smartphones are high-end products and Apple reports how many iPhones are sold each quarter.

     

    Samsung's biggest competitor is not just Apple, it is also Google, HTC, LG and all other manufacturers that make Android phones. Samsung does make great smartphones, but it lacks one essential competitive advantage--it does not own the Android operating system.
    7 Jan, 02:47 AM Reply Like
  • King Rat
    , contributor
    Comments (603) | Send Message
     
    Bloomberg mentions falling television demand but not much else.. Samsung has hundreds of product divisions so the singular focus on phones seems nearsighted. Net margin shrank but revenue rose. What role did exchange rates play? What role did input costs play? Where did market share go?
    It could be that Samsung grew revenue and market share while losing less profit than others who lost revenue, market share, and even more profit.

     

    I don't like Samsung or their stakeholder unfriendly business model, but this article was still a hit piece.
    7 Jan, 03:11 AM Reply Like
  • de telegraaf
    , contributor
    Comments (8) | Send Message
     
    Right King Rat, let's wait for the detailed results before we slam them. It would for instance be interesting if they would reveal (which they never will) what their smartphone margins are. People like to slam Apple regularly because they are open and transparent in their financial information. Samsung would be sh*tscared to do something similar, and is therefore the implicit loser.
    7 Jan, 04:25 AM Reply Like
  • Warren Buffet007
    , contributor
    Comments (934) | Send Message
     
    Take Care ,!, The smartphone market seems to be saturated!
    7 Jan, 12:26 PM Reply Like
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