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Samsung forecasts 5.1 billion earnings for Q4, barely a third comes from mobile

Posted: , by Daniel P.

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Samsung forecasts 5.1 billion earnings for Q4, barely a third comes from mobile

With rapid restructuring of both its corporate organization and product lines, Samsung managed to turn the ship around, and stabilize its sales and profits that were heading downwards after the flagship smartphone market started maturing a year or two ago. Granted, it doesn't post record $8 billion quarters like at this time in 2013, but $5.1 billion isn't too shabby either.

That's exactly the operating income that Samsung predicts it will report for this past Q4, reflecting a full quarter of Note 5 and Galaxy S6 edge+ sales, but also of the hundreds of other gadgets, big and small, as well as components like memory and displays that Samsung sells. Samsung's earnings forecasts stray very little from the actual audited results it posts a few weeks later, so this $5.1 billion figure would mean significant growth in earnings from the same quarter in 2014, yet about a 15% decline from the previous Q3 period in 2015.

The mobile unit of Samsung likely contributed to about a third of these earnings estimates, according to analysts' median estimates, which is both good and bad. Good, as it indicates that Samsung is weaning itself off its dependence on phone margins, which just two years ago reached up to 70% of its profits, but at the same time this shows that Samsung is feeling the pressure from value-for-money vendors like Xiaomi, Meizu and others, and the average selling price of its phones has diminished.

SamsungQ4 2015 Q3 2015Q4 2014Q4 2013
Revenue (USD billion)$45$43$44$50
Earnings (USD billion)$5.1$6.14$4.4$8.3

source: Samsung & Bloomberg

26 Comments
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posted on 08 Jan 2016, 06:35 12

1. twens (Posts: 953; Member since: 25 Feb 2012)


Smart business group. I like their try new things spirit.

posted on 08 Jan 2016, 10:35

15. phonearenarocks (Posts: 211; Member since: 26 Mar 2015)


Would love to see exact break up of profits from other sectors as well.

posted on 08 Jan 2016, 13:44 2

21. Techist (Posts: 225; Member since: 27 Jan 2015)


Here's a link to that information for Samsung Electronics upto Q2 2015:

http://www.technologyadventurer.com/debunked-the-myth-that-apple-makes-90-of-the-profits-in-mobile/

posted on 08 Jan 2016, 11:46 1

18. Well-Manicured-Man (Posts: 232; Member since: 16 Jun 2015)


@Daniel P.: What the heck do you want to tell us with this statement?

"Good, as it indicates that Samsung is weaning itself off its dependence on phone margins, which just two years ago reached up to 70% of its profits, but at the same time this shows that Samsung is feeling the pressure from value-for-money vendors like Xiaomi, Meizu and others, and the average selling price of its phones has diminished."

Do you honestly want to tell us that the drop in profits in Samsung's mobile devision helps Samsung to become less dependent on smartphone sales or to diversify the origin of Samsung's profits? Lower profits can never ever be positive for a company. A positive diversification would be to keep profits from mobile devision flat or growing while profits from other devisions outgrow the profits from the mobile devision.

Compared to Q4 2013, Samsung's Q4 2015 revenue and profit declined drastically. Even though there is Christmas in the western world in Q4, Samsung's revenue and profits declined from Q3 2015 to Q4 2015.

Interpretation: Samsung cannot be happy at all with the development. They are not in financial trouble but the trend is working against Samsung.

posted on 08 Jan 2016, 06:43

2. yoosufmuneer (Posts: 1471; Member since: 14 Feb 2015)


Idk why but their prices go way down. iPhone prices rarely drop in my country.

posted on 08 Jan 2016, 08:52 2

12. Hexa-core (banned) (Posts: 2131; Member since: 11 Aug 2015)


It indeed goes alot down. The 64GB Galaxy S6 Galaxy now costs $560 where I live.
And S5 now costs ~300$, pretty cheap and far more powerful than any 2015 midranger at same price.

posted on 08 Jan 2016, 17:21

22. mrochester (Posts: 521; Member since: 17 Aug 2014)


Their prices go down because they can't keep charging as much as they do else no one would buy the products. iPhones don't drop in price as Apple has no problem shifting at the price they are at. Customers see so much more value in Apple's products than they do in Samsung's.

posted on 08 Jan 2016, 07:13 11

3. Jason2k13 (Posts: 1117; Member since: 28 Mar 2013)


... and you still hear people "trolls mostly" saying Samsung is going bankrupt soon blahh blahhh when their earnings is ALOT more than any android manufacturers.

HTC, LG and Sony will have to go down first before Samsung does.

posted on 08 Jan 2016, 07:24

5. TheBiz (Posts: 231; Member since: 13 Apr 2015)


idk about you but i wouldnt want any of these yo disappear as i love all of em and im still waiting for nokia and bb to rise , i need to see from erce battle of features and functionality,innovation from these companies. aaand at the same time hope apple joins the group keeping aside its eff ego

posted on 08 Jan 2016, 07:37 1

7. rishav20193 (Posts: 183; Member since: 18 Jul 2015)


may be htc will go down.......lg & sony has lot of other products to save them

posted on 08 Jan 2016, 08:05

10. Hallyu (Posts: 311; Member since: 21 Jul 2015)


Talking about collapse, I bet the poor tech and old school company Sony is going to donate the first blood that its sibling VAIO already proved. I dare to leave this site if that won't happen within this first half of the year. Don't know about HTC. But LG will stay alive forever just like Samsung.

posted on 08 Jan 2016, 07:24 3

4. manojmcn (Posts: 389; Member since: 16 Jul 2015)


Samsung's results are bad only in perspective of their earlier results. $5 bn profit for quarter would be the dream of 90% of all MNCs around the world. They are able to keep up with the sales numbers with over 83 million smartphones in the Q4 2015 and will remain the biggest manufacturer by sales numbers. But the margins are now too low and flagships are selling less. Still commendable given that most chinese phones are sold at very cheap rates suicidal pricing.

posted on 08 Jan 2016, 07:37

6. Shocky (Posts: 2129; Member since: 16 May 2012)


Sales surge when the Galaxy S devices are launched and then trail off towards the end of the year, not surprising but no growth.

I hope Samsung don't rethink using Android because without them it's screwed, App support will follow Samsung due the amount of phones they ship.

However, I wouldn't be that bothered if they switched to Windows, I'm sure Microsoft would love the massive influx of developer support that would happen as a result, they really need it.

posted on 08 Jan 2016, 07:42

8. rishav20193 (Posts: 183; Member since: 18 Jul 2015)


its just a matter of time.........when apps will be developed for win 10 too.......as UWA (universal windows apps) are there. & no developer can think of ignoring 80% + market share of win pc's & if they develop it as UWA......the developers will cover a larger user base comparatively.

posted on 08 Jan 2016, 07:48 1

9. Hallyu (Posts: 311; Member since: 21 Jul 2015)


Even though its mobility department shows a lower sale than it did previous years, it's still a wonderful achievement for Samsung considering how tough competition is nowadays, especially when it get unfair treatment in China. There might be a compromise in sale volume, but in real world, I mean in real tech and innovation, these Xiaomi, Huawei and Lenovo don't have the balls to face Samsung technologically. Apparently, most of their internal components are manufactured by Samsung and LG, they aren't' capable enough to be a REAL manufacturer yet. Luckily, they have an edge over Samsung in term of dirty low selling price, and no matter how much they lose, their government would pay them well to make sure their operations are able to continue.

posted on 08 Jan 2016, 08:48

11. UglyFrank (Posts: 1553; Member since: 23 Jan 2014)


Imagine their profits if they didn't care so much about R&D.

posted on 08 Jan 2016, 09:17 3

13. Hexa-core (banned) (Posts: 2131; Member since: 11 Aug 2015)


Samsung isn't Apple! Sammy invests alot in R&D because they care so much about their reputation and to bring it's fans the bleeding-edge and latest tech!

Apple's concern is all about profit; what innovation does Apple bring compared to Samsung, or even LG?

Profit isn't what makes a company great, innovation does!

posted on 08 Jan 2016, 09:54 1

14. Napalm_3nema (Posts: 2088; Member since: 14 Jun 2013)


You really don't understand business, do you? Samsung spends more on R&D because they make thousands of products. ALL of Apple's products would fit on a standard dining room table. All of Samsung's mobile products wouldn't fit on that table, let alone their appliances, TVs, military equipment, etc.

posted on 08 Jan 2016, 10:38

16. UglyFrank (Posts: 1553; Member since: 23 Jan 2014)


You seem to have gotten the wrong impression of me. I think it is a good thing that they do so much R&D. These comments were sent from my S5.

posted on 08 Jan 2016, 10:38

17. UglyFrank (Posts: 1553; Member since: 23 Jan 2014)


You seem to have gotten the wrong impression of me. I think it is a good thing that they do so much R&D. These comments were sent from my S5.

posted on 08 Jan 2016, 11:52

19. Well-Manicured-Man (Posts: 232; Member since: 16 Jun 2015)


Samsung has to invest so much into their R&D because they are a supplier to other companies.

If Samsung does not invest into their R&D, customers like Apple will stop to buy from Samsung sometime in the future.

Furthermore, Samsung is active in so many markets like Washing Machines, Memory computer chips, CPUs, TVs etc., they have to invest into R&D for many products which in consequence drives their R&D expenses up.

posted on 08 Jan 2016, 17:26

23. mrochester (Posts: 521; Member since: 17 Aug 2014)


iOS, Retina screens, TouchID, 3D Touch, Lightning port, Apple Pay, A9 processor, multitouch, pinch to zoom, iMessage, Facetime, AirPlay.

There's a small list to start you off :)

posted on 10 Jan 2016, 04:06

26. tedkord (Posts: 9950; Member since: 17 Jun 2009)


Of what? Other than iOS, and to an extent the A9, those are all things Apple either bought, copied or stole.

posted on 08 Jan 2016, 12:09

20. ameran (Posts: 236; Member since: 04 Dec 2013)


I really get happy to see companies like Samsung do better, because they invest a lot in developing new technologies to make people's lives easier.

posted on 08 Jan 2016, 22:08

24. cripton805 (Posts: 1417; Member since: 18 Mar 2012)


Barely a third... Why not just say a third? Is that a bad thing?

posted on 09 Jan 2016, 01:39

25. obedchuni (Posts: 157; Member since: 16 Jun 2014)


How come Samsung only earned 5.1 billion, I think son of a Samsung techxie will be happy to see the earning of Samsung, also they can't beat apple on earning even after record selling of Samsung Galaxy models, I thought that Samsung would earn more after selling above 90 million phone much more than apple 74.5 million.

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