Samsung reports its latest quarterly numbers
Samsung has just released its earnings for the fourth quarter of 2015, and announced that a year-end inventory adjustment led the company to report a decline in smartphone shipments when compared to the third quarter. Besides the sequential decline in shipments, sales declined as well thanks to a product mix that favored low to mid-range handsets.
Led by the Samsung Galaxy Tab A and the svelte Samsung Galaxy Tab S2, tablet sales rose in the quarter to 9 million units. That is impressive considering that the tablet market has been weak. Yesterday, Apple reported that iPad sales declined by 25% during the quarter. For this year, the manufacturer expects single-digit percentage growth in both smartphones and tablets. Competition will be tougher and demand will be softer. Through innovation, Samsung expects to increase smartphone sales and return margins to double digits. For the quarter, smartphone margins were 8.9%, up from the 7.5% achieved in 2014.
For 2016, the company looks to increase the importance of tablet and wearable sales to the bottom line. It also hopes to increase the usage of mobile payment service Samsung Pay. Its 4G LTE network services covered global markets and added to the bottom line in 2015. Samsung expects to continue rolling out these services around the world.
For the fourth quarter of 2015, Samsung's mobile division had $21 billion USD in sales, down 4.9% year-over-year and 6% sequentially. Operating profits amounted to $1.85 billion, up 13.8% year-over-year, but a 7% decline from the prior quarter. For all of 2015, the mobile division rang up $87 billion in sales for the year with operating profits of $8.5 billion. That is a 7.3% drop in sales from 2014, and a 30% drop in profits.