Samsung profit growth decelerates; warns on Q1

Samsung's (SSNLF) net-profit growth slowed significantly in Q4, rising 5.4% on year to 7.3T ($6.7B) won vs an increase of 25.6% in Q3.

Sales increased 5.7% from a year earlier to 59.3 trillion won.

Operating profit -6% to 8.31T won, the first drop in two years.

The company warned that it will be "challenging" to improve its earnings in Q1, "as the weak seasonality of the IT industry will put pressure on demand for components and TV products."

The strength of the Korean won hurt earnings by 700B won ($651M), and the company took an 800B won one-time charge related to employee bonuses.

Operating profit at Samsung's mobile unit was flat on year at 5.47T won but down from a record 6.7T won in Q3, hurt by the release of new iPhones.

Samsung expects Q1 smartphone shipments to rise at a "mid-single digit" pace on quarter and tablet shipments at a "high single-digit" rate.

Further operating profit breakdown: chip division rose to 1.99T won from 1.42T won a year earlier; display plunged 90% to 110B won, dragged down by weaker-than-forecast sales of the Galaxy S4 and poor demand for TVs; consumer-electronics dropped to to 660B won from 700B won.

Samsung intends to spend a similar amount on capex in 2014 as in 2013, when it invested 23.8T won.

Shares closed +3% in Seoul.

Comments (8)
  • omarbradley
    , contributor
    Comments (966) | Send Message
    everyone talks Apple but Samsung has truly been THE story of the past decade, not Apple. Having said that "Silicon Valley itself has been on the war path for quite some time now." This Silicon Valley Story is not about the build out of a cell phone/os architecture.


    They're taking the Stars.


    No way would I be shorting Microsoft here...that thing could go to 60 if they execute correctly.


    "That's just one part of the all new ecosystem" however.


    I remain bearish on the market here...but not this aspect of USA Inc. Still..."past performance is no guarantee of future results." How this gets monetized into the economy as a whole will be interesting to report on.


    I know i've had a lot of fun reporting on it....especially since no one else really has actually. "And I ain't talking the equity moves" either. This stuff has implications...and yes "I can put that in a 30 second sound bite" too.


    Indeed....that's exactly what i've been doing five years running now.
    No one has to explain to me how my ratings are doing....
    24 Jan 2014, 02:50 AM Reply Like
  • Tack
    , contributor
    Comments (16179) | Send Message
    If MSFT executes what correctly?
    24 Jan 2014, 08:39 AM Reply Like
  • june1234
    , contributor
    Comments (4262) | Send Message
    Did you mean MS executing their customers cause I can agree with that if you did.
    24 Jan 2014, 09:13 AM Reply Like
  • Jack Baker
    , contributor
    Comments (1284) | Send Message
    And how exactly does you post relate to these headlines of Samsung reporting a disastrous quarter?
    24 Jan 2014, 11:06 AM Reply Like
  • june1234
    , contributor
    Comments (4262) | Send Message
    We'll know more after apple reports if its just a saturation issue. VZ did report a 10% yr over yr decline in smartphone activations . Samsung phones are nice but I would not consider them up to par with the phenomenal marketing job of blitzing every form of media they do. I have an S3 on my account . I wouldn't use one if I absolutely had to get somewhere using a Nav app on that phone thats for sure. Depends what you use em for I guess. They do some things very well. they seem to develop other issues on next generation models after fixing the ones from the previous versions.
    24 Jan 2014, 09:12 AM Reply Like
  • thotdoc
    , contributor
    Comments (1958) | Send Message
    Samsung revenue and profits down.
    Apple revenue and profits up.
    24 Jan 2014, 09:24 AM Reply Like
  • PeteCal
    , contributor
    Comments (90) | Send Message
    So, can a guy buy Samsung?
    Any special risks other than currency risk, war, etc?
    24 Jan 2014, 09:49 AM Reply Like
  • Jack Baker
    , contributor
    Comments (1284) | Send Message
    How did shares close up 3% on this disastrous quarter? If Apple reported a quarter like that the stock would get halved.
    24 Jan 2014, 11:03 AM Reply Like
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