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Samsung's Q3 operating profits drop by more than half

Posted: , by Alan F.

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Samsung's Q3 operating profits drop by more than half
Earlier this month, Samsung warned that its third quarter operating profits would be dropping along the lines of 45% year-over-year. Sure enough, on Tuesday morning, Samsung said that the third quarter of the year was not a good one. In fact, the manufacturer said that its operating profits declined by more than 50% from last year's Q3.

For the quarter, the Korean company estimates that its operating profits fell 57.8% to 61.8%. That works out to a range between $3.6 billion and $4 billion USD. Analysts were expecting a profit of $4.04 billion for the three month period. Last year, Samsung reported operating profits of $9.6 billion for the same quarter.

More than 60% of Samsung's profits are derived from mobile phone sales. The company did say that smartphone sales were up for the quarter, but the combination of lower average selling prices and higher marketing costs cut into Sammy's operating margins. The company also warned about the current quarter as sales of the Samsung Galaxy S5 are coming in lower than expected. The Samsung Galaxy Note 4 just started going on sale last month.

Some analysts are expecting Samsung's chips to bring in more profits than its mobile devices as soon as this quarter. That hasn't happened since the second quarter of 2011.


source: WSJ

103 Comments
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posted on 06 Oct 2014, 23:07 26

1. fzacek (Posts: 2486; Member since: 26 Jan 2014)


Too much money wasted on gimmicky advertising...

posted on 06 Oct 2014, 23:23 13

5. AnTuTu (Posts: 1575; Member since: 14 Oct 2012)


I know they will smash the market with Note 4.

posted on 06 Oct 2014, 23:38 21

14. theman414 (Posts: 132; Member since: 08 Jun 2009)


I seriously doubt it. Especially with the gimmicky Note Edge. I'm all about competition because the consumer makes out the best but it feels like Sammy is just throwing everything at the wall right now hoping that something sticks and to say they were the first to do it.

posted on 07 Oct 2014, 00:32 11

31. CoastCity (Posts: 247; Member since: 07 Mar 2014)


You can't realy say that "they just throwing everything at the wall hopping..." for a company of Samsung's magnitude.

They just cut the prices (good for us), that's all. Sales were increased.
And the secret lyes in the last sentence: "That hasn't happened since the second
quarter of 2011".
What happened then? (They released the SII by the way) And what happened after that?
2011 http://goo.gl/fOqau
2012 http://goo.gl/4yaxp2
It'll rebound soon

posted on 07 Oct 2014, 00:35 8

32. neops (Posts: 284; Member since: 28 Jan 2014)


Strategic movement to cut prices

posted on 07 Oct 2014, 00:40 10

36. Ashoaib (Posts: 3229; Member since: 15 Nov 2013)


price cut is always welcome with a warm heart... I hope note 4 in $500 :D

posted on 07 Oct 2014, 01:27 3

48. CoastCity (Posts: 247; Member since: 07 Mar 2014)


Note likely tho

posted on 07 Oct 2014, 08:27 3

78. Chaseism (Posts: 82; Member since: 08 May 2013)


You might say that, but investors don't care about popularity, they care about profit. Especially when their main competitor is selling a record number of phones and making a huge profit doing it. By no means is Samsung going to fall apart. But they will need to change something to up their cash.

posted on 07 Oct 2014, 18:27

98. Crispin_Gatieza (Posts: 1564; Member since: 23 Jan 2014)


Or maybe the price of plastic skyrocketed.

posted on 07 Oct 2014, 09:14 1

80. needa (Posts: 205; Member since: 30 Jun 2014)


metal phones are certainly going to help. but i find that most people are miffed with their galaxy devices when they see my moto. and have been for the last year. you can see the look on their faces... "i thought i was buying the best".

posted on 06 Oct 2014, 23:53 13

17. iLegend (Posts: 41; Member since: 05 Jun 2013)


The next big Decline is here

posted on 07 Oct 2014, 01:15 2

46. Settings (Posts: 1449; Member since: 02 Jul 2014)


Yeah, Sammy is going down the Bell curve.

posted on 07 Oct 2014, 12:16 1

89. donfem (Posts: 639; Member since: 30 Mar 2011)


more like idecline yea?

posted on 07 Oct 2014, 00:07 6

24. Iodine (Posts: 1285; Member since: 19 Jun 2014)


The only "big" improvement compared to the note 3 is camera and construction.
Plus the strongest competition note had ever faced has been released, it sells in millions and note is late to the party.

So what do you think, will a small upgrade smash the market, only bacause it's samsung ? Samsung certainly thinks so, that's why they are failing, they are too arrogant to say to themselves that they aren't best anymore and that people don't want to buy their products.

posted on 07 Oct 2014, 00:43 10

37. Ashoaib (Posts: 3229; Member since: 15 Nov 2013)


small upgrade? well you need to open up your eyes a little bit more... ip6 is the one which is called small upgrade... note 4 has upgrade in all departments, so cannot be called small upgrade

posted on 07 Oct 2014, 04:13 2

67. gigaraga (Posts: 1454; Member since: 29 Mar 2013)


Agree. In fact Samsung is one of the only big companies that makes true changes to its phones.

posted on 07 Oct 2014, 06:32 2

76. Martin_Cooper (Posts: 1368; Member since: 30 Jul 2013)


You serious? Iphone 6 has better cpu, better ram, not more ram but better one, still an upgrade, better screen quality, higher brightness etc, better speakers, faster, better camera, yes same 8mp count but much better optics and other technologies, how is that not an upgrade but note4 is?

posted on 07 Oct 2014, 11:18 3

88. letosaw (Posts: 101; Member since: 05 Aug 2014)


iphone 6 doesn't have better ram it's still 1gb ddr3:)) better screen quality? only resolution is better. better speakers? no, it's almost the same)) and NOTE 4 has better cpu (exynos 5433) , ram remains 3gb ddr3 but it's more then enough.better screen not only in resolution but also in quality, much better camera with OIS. and much more

posted on 07 Oct 2014, 16:50 1

96. Ashoaib (Posts: 3229; Member since: 15 Nov 2013)


hmm... so you are serious but may be you are blind, well its ok

posted on 07 Oct 2014, 06:22 1

74. Pattyface (Posts: 1514; Member since: 20 Aug 2014)


Android authority seems to disagree with your statement. They fell in love with the note 4 in their review

posted on 07 Oct 2014, 09:56

83. QWIKSTRIKE (Posts: 1042; Member since: 09 Mar 2010)


Good points Samsung made mistakes like failing to make the Note 3 LTE compatible on all carriers. Making Galaxy S4 LTE available a few months after not making the original S4 LTE ready. They never should have let Apple launch the New series iPhones so far in advance of the Note 4. They should stop making tiered products that's always less than premier milking sales.

Instead they should make premium products and put all the bells and whistles rather than to make slightly improved products to milk sales.
They could have made the Note 3, and the S4 LTE ready on launch rather than launch a better variation a few months later.

The other end of the equation is that other MFG's are making phablets, and I for one wanted a Note 4 until the Google Flavored Moto "Shamu" appeared. The Note 4 software suite appeals to me, but pure Google appeals more if it is on a larger sized phone like the "Shamu".

posted on 07 Oct 2014, 02:34 1

64. Sonar (Posts: 14; Member since: 01 Jul 2014)


They should have released the Note 4 right after the announcement.

posted on 07 Oct 2014, 06:09

72. frederick333123 (Posts: 76; Member since: 15 Jun 2013)


no you dont...

posted on 07 Oct 2014, 06:23

75. funnyguy (banned) (Posts: 244; Member since: 10 Jan 2013)


F**ck the Galagy Note 4.

posted on 07 Oct 2014, 12:19

90. donfem (Posts: 639; Member since: 30 Mar 2011)


Waste of space

posted on 07 Oct 2014, 18:22

97. gigaraga (Posts: 1454; Member since: 29 Mar 2013)


Let ALL the butthurt flow through.

posted on 07 Oct 2014, 19:15

99. InspectorGadget80 (unregistered)


They will smash it with their new TV's for 2015

posted on 06 Oct 2014, 23:57 6

19. LiyanaBG (Posts: 381; Member since: 07 Nov 2013)


the reason for all this is they are very slow to release the note 4. they never learn.

posted on 07 Oct 2014, 00:47 6

40. Ashoaib (Posts: 3229; Member since: 15 Nov 2013)


I think slow release has eaten up atleast 1 million sales of note 4... one of my friend also wanted note 4 but he got good deal for ip6 and he purchased it although he is not really a fan of apple

posted on 07 Oct 2014, 00:04 3

23. cncrim (Posts: 791; Member since: 15 Aug 2011)


Even for me start to ship away from Samsung product and go to HTC and Motorola. I found quite alot half bake features, she just throw into the device that cause the phone hick up and worse slow down. Touchwiz is kill the user experience, yes samsung phones have nice spec but day to day use not so great. Take Moto X as example, mid range spec but when come to day to day performent it does much better than s4 beside the camera quality.

Samsung use to be my favorable until she lock down bootloader, example the S4 i have it working beautiful on 4.3 then when update to 4.4 my phone freeze every two day and bad part is cant downgrade.

posted on 07 Oct 2014, 00:46 2

39. aryanfr1 (Posts: 120; Member since: 24 Jan 2013)


I just heard on BBC that Samsung is not innovator but apple is by a financial expert so Samsung is loosing profits.

posted on 07 Oct 2014, 01:51 9

55. Ashoaib (Posts: 3229; Member since: 15 Nov 2013)


bbc, cnn and most of other media talk only positive about apple... surely they will make apple innovative regarless of it is or not... while they will make samsung sounds like no innovation even if it innovates... thats western media

they are doing good marketing for apple and apple is saving marketing cost, whereas samsung is spending huge on marketing to keep it up

posted on 07 Oct 2014, 07:54

77. aryanfr1 (Posts: 120; Member since: 24 Jan 2013)


That is what I was wondering what apple had innovated on ip6 and plus or iwatch. I didn't hear anything about ilaundry because that is innovation people needs or iretards app which automatically finds and fund Izombies and itrolls. Now thats innovative things Iidiots hoped for.

posted on 07 Oct 2014, 16:40

95. Immolate (Posts: 310; Member since: 17 Jun 2011)


The smartest person in BBC knows about as much about mobile phones as the average reader here.

posted on 06 Oct 2014, 23:10 4

2. gigaraga (Posts: 1454; Member since: 29 Mar 2013)


Before everyone starts bashing Samsung, note that this is due to the lowered pricing of their handsets as well as from the marketing. Smartphones sales do go up, but because of the reduced smartphone prices, this affects their sales too.

posted on 06 Oct 2014, 23:29 2

9. Jobayer (Posts: 167; Member since: 22 Feb 2013)


I was this close to buying the note 3 , stopped because touchwiz and cyangen doesn't have a stable build .

posted on 06 Oct 2014, 23:34 2

12. gigaraga (Posts: 1454; Member since: 29 Mar 2013)


How did TouchWiz stop your purchase? I want your opinion on it.

posted on 07 Oct 2014, 00:00 1

20. techspace (Posts: 1027; Member since: 03 Sep 2012)


The main problem is that they don't have their own software, they use the same software that is available to most of the companies in the world and the skin that they use to differentiate themselves from the competition is feature rich but it's not very fast and responsive...now this explains why they are working hard on tizen.
I think we should be happy about it because It's good to have competition.

posted on 07 Oct 2014, 00:22 3

27. willytbk (Posts: 219; Member since: 15 Aug 2012)


why they lowered their selling price of their handsets ? coz it doesn't sell as well as the old days.

posted on 07 Oct 2014, 01:24 2

47. Settings (Posts: 1449; Member since: 02 Jul 2014)


Yes smartphone sales go up, thats why almost all have Samsung smartphones. But their experiences with those device isn't enough to make them purchase another Samsung device.

Marketing was good, they saturated well enough. But those devices aren't keeping up what the ads are saying. To much hype killed the S5 and so will the next Note.

posted on 06 Oct 2014, 23:12 6

3. 0xFFFF (Posts: 3806; Member since: 16 Apr 2014)


If Samsung had half a brain, they would stop locking their phones up and loading them with bloatware.

posted on 06 Oct 2014, 23:15 3

4. theman414 (Posts: 132; Member since: 08 Jun 2009)


These numbers are only going to get worse, especially now that iphone has the larger screen which was the only reason a lot of people purchased the Galaxy or Note.

posted on 06 Oct 2014, 23:23 5

6. joey18 (Posts: 589; Member since: 20 Jul 2010)


the moment of true samsung need to make real phone thast why I drop galaxy s3 because is gimmick and all are useless they release new phone every minute and idont know which one is the real galaxy

posted on 07 Oct 2014, 00:51 2

41. dorfoz (Posts: 149; Member since: 18 Oct 2011)


There's 2 versions of Galaxy Note coming up! There's also gunna be 3-10 versions of Galaxy (insert a nickname here). One with a better camera, another that can swim, and another that can make you sandwitches.

Oh.. and when a new OS comes out.. You don't know whether you're getting that update or not.

posted on 06 Oct 2014, 23:24 2

7. newbey123 (Posts: 553; Member since: 19 Mar 2012)


Since alot of manufacturers are making large screen phones, people have other options and are going with those.

posted on 06 Oct 2014, 23:25 7

8. Barracuda (Posts: 22; Member since: 21 Feb 2014)


S3 was my last Samsung phone that I bought, bought a nexus 4 and using the Nexus 5 now, I convinced no less than 50 people at the time when they released the S3 to change over from apple to Samsung.

Now I tell all my friends to use Nexus devices if they don't want to wait and wait and wait for software updates.

posted on 06 Oct 2014, 23:31 2

10. nctx77 (Posts: 1650; Member since: 03 Sep 2013)


Sammy just fell off the edge lol! They are putting out prototypes trying to get a sale?

posted on 06 Oct 2014, 23:33 6

11. Liveitup (Posts: 1798; Member since: 07 Jan 2014)


According to some haters when this happens on other platforms that must mean that the OS sucks, so I guess Android sucks according to their way of thinking.

posted on 06 Oct 2014, 23:53 4

18. xfire99 (Posts: 785; Member since: 14 Mar 2012)


According to u stupid analyze, iOS must sucks alot more than Android, since Android have total 84% vs iOS 11% marketshare Worldwide. Also grabbed marketshare from iOS in US market this year.
Think twice before write something stupid again.

posted on 07 Oct 2014, 00:55 4

43. Liveitup (Posts: 1798; Member since: 07 Jan 2014)


Its pretty dense to deduce that i was talking about iOS, i rather \WP if you must know but as a fan of tech too often you see many assuming the quality of the OS is the sole reason affecting the sales of another OS devices, im simply stating that their are different reasons for marketshare falling. Feel free to continue ranting, the floor is yours.

posted on 07 Oct 2014, 00:45 6

38. dorfoz (Posts: 149; Member since: 18 Oct 2011)


Androids don't suck dude. It's just a preference of the consumer which system they prefer. What sucks are the fanboyism of readers who don't realize the possibilites each OS has.

posted on 07 Oct 2014, 04:34

68. Venkatramanan (Posts: 308; Member since: 15 Aug 2014)


+1 to you. Each user has their own priority and Functions which needs to be satisfied. But the fan boys of all the camps bashes other OS for no reason.

posted on 07 Oct 2014, 06:21 1

73. funnyguy (banned) (Posts: 244; Member since: 10 Jan 2013)


I have never heard anyone buying a phone because of Android,
People buy LG and Samsung phones because they offer large screens,
Android just happens to be there....

posted on 06 Oct 2014, 23:37 1

13. hueyP (Posts: 3; Member since: 18 Sep 2014)


i think they release too many phones with high expectations, but i do think they'll bounce back due to the higher build quality mid range and flagship phones. Touchwiz do need a overhaul but it do offer the best multimedia experience IMO.

posted on 06 Oct 2014, 23:44 4

15. superfans (Posts: 155; Member since: 30 Jul 2012)


The look of all the devices released haven't change since 2013 , all of them look like s4 , plus Lenovo and Huawei and xiaomi offer same spec for lower price. Samsung having a hard time to take back China market

posted on 06 Oct 2014, 23:51 1

16. Muayyad (Posts: 236; Member since: 05 Oct 2012)


Competition is going to be much tougher. Now the iPhone has a bigger screen, Apple fans are going back and even some android users will switch to iPhone. No way it is going to be me.

posted on 07 Oct 2014, 00:00 4

21. sunday (Posts: 39; Member since: 15 Aug 2014)


Samsung still make more profit than any other Android phone manufacturer. So, stop bashing samsung as if they dont make good phones. If you add the profit of sony, lg and htc together its still less thAn what samsung earns as profit. Only apple make more profit than samsung and every phone maker will continue to have loss since the China companies are ready to sell 5" phones for less than $100. Ask lg, sony and htc how much they make from the sales of LG G3, xperia z2 and HtC 1 m8 and u will discover they are not close to galaxy s5 sales. Fake china phones are all over the place selling at d lower price.

posted on 07 Oct 2014, 00:03 8

22. HugoBarraCyanogenmod (Posts: 985; Member since: 06 Jul 2014)


galaxy alpha, $400
Xiaomi 4, $300

you decide

posted on 07 Oct 2014, 02:02 4

57. Cicero (Posts: 848; Member since: 22 Jan 2014)


Galaxy Alpha.

posted on 07 Oct 2014, 03:06 3

66. xperiaDROID (banned) (Posts: 5629; Member since: 08 Mar 2013)


The Galaxy Alpha is a beautiful phone, same goes to the Xiaomi Mi4. But the problem is that the Alpha only has a HD screen and the battery life is not good and also it's more expensive than the Mi4.

So, for me, Xiaomi Mi4.

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