Samsung Electronics reports Q3 financial results, chips compensating for unimpressive mobile sales

Samsung Electronics reports Q3 financial results, chips compensating for unimpressive mobile sales
Right on cue, Samsung Electronics released the consolidated financial results for the third quarter of 2018. The results show how each subdivision of Samsung Electronics has performed over the last three months in terms of revenue and profits, as well as the overall results for the quarter.

Looking at the global picture, Samsung has earned itself a pat on the back, improving on its sales total with more than 5%, reaching $57.46 billion. More importantly, however, the company’s consolidated profits are up 20.9% from Q2 of 2018, hitting $15.41 billion.

Beyond the dry numbers, it’s interesting to see how the subdivisions involved in the mobile phone industry have been performing.

The Semiconductor Business, responsible for manufacturing the chips for RAM, Storage, SoC, modems and more, has brought in $11.98 billion in profits, almost 78% of what Samsung Electronics made in total for Q3 of 2018. Samsung is explaining the excellent results with the high seasonal demand for DRAM chips and high-density flash storage, used in smartphones that were released in the past couple of months.

The Display Panel division is also chipping in with a decent $965 million. However, this includes panels for TVs and other products, not only smartphones. When it comes to small OLED panels, Samsung “will seek to reinforce partnerships with major smartphone manufacturers and improve cost competitiveness”. As we know, Samsung is the world’s largest manufacturer of OLED displays for smartphones, supplying most of the ones that can be found on Apple’s iPhones and Google’s latest Pixel phones. Hopefully, the improved cost competitiveness will translate to more affordable smartphones with OLED screens.

Lastly, we’ll take a look at the Mobile Communications Division. It contributed significantly in terms of revenue with $21.86 billion, but when it comes to profit, the number goes down to just $1.95 billion. The results are lower than both Q2 of 2018 and Q3 of 2017. The reason for that, according to Samsung, are decreased sales of their mid- to low-end products that negated the boost coming from the strong performing Galaxy Note 9 and other higher end phones. To improve sales, Samsung is forced to spend more on marketing and promotions, which chips away from the Mobile Division’s profits.

Forecasts for 2019 are not very positive, but Samsung’s plan is to “expand sales of premium smartphones through differentiated design and a diversified lineup” and “adopting cutting-edge technologies across its entire Galaxy lineup, including the Galaxy A series”. We translate that to: foldable phone, in-display fingerprint sensor, 5G and hopefully the under-display camera sensors Samsung talked about at a conference recently.

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27 Comments

1. VasiliS7

Posts: 203; Member since: Jan 10, 2017

ok. Only PhoneArena can manage to write an article for an impressive financial Q from Samsung with the word "Unimpressive" in the Title!

2. Ninetysix

Posts: 2965; Member since: Oct 08, 2012

Nah..GSMArena also used "Unimpressive" last quarter. https://goo.gl/Spm6HB

16. strategic_developer

Posts: 1627; Member since: Jul 17, 2018

But it specifically said unimpressive sales of the S9. It didnt day their overall num era were unimpressive like here. Again you blind Apple fans never understand or see the difference. Unpressice was used in both, but in specific context, which you missed

4. Galaxy_Apple

Posts: 129; Member since: May 24, 2015

the phone business is not looking good. note 9 isn't really helping them as much as people boast about that phone. it's a ok phone prefer s9 as its smaller and easier to use. Note isnt a volume sales product. S10 pricing is crucial to improve their sales they should stop chasing apple n compete with oneplus , xiaomi etc....

5. sleepypandaeyes

Posts: 392; Member since: Apr 12, 2015

Very true, Samsung's real competitors are android not apple, what works for apple doesn't work for Samsung it seems. They really need to improve their mid and budget lines, using OMD manufacturers for asian markets to reduce prices seems like a clever move. The S10 has to be truly exceptional but I hope they don't scrimp out to much on the flat screen lite model. From my recollection the standard s7 was very popular and sold very well.

7. Galaxy_Apple

Posts: 129; Member since: May 24, 2015

S7 was good n all but nothing beats the S3 and S4 days for samsung those were real gangbusters , they need to take us back to those days. Offer a product that will blow all the chinese phones out of the water at great prices. Which I still remember paying just 500-600$ for a S4. between me n my friends we had 10 S4s and 7 S3s, all at superb consumer friendly prices.

18. strategic_developer

Posts: 1627; Member since: Jul 17, 2018

Samsung doesn't and has never depended on phone sales and they have been making phones longer than most OEMs. Components have always been their biggest business. They will still sell over 300M phones in 2018 and for the foreseeable future. When you have the product ranges Samsung has, you can't record as high profits as Apple because all those products requires more R&D spending, advertising as the article stated, higher distribution volumes, more employees to pay, more factories to run and more. All.of which most OEMs dont have because they 3rd party out everything which is cheaper Considering Samsung size and how much product they actually make, which is over 100 product that span over 100 categories, $15B is a considerable amount of money. No one on this page makes that kind if money.

9. Well-Manicured-Man

Posts: 713; Member since: Jun 16, 2015

Samsung should leave the mobile handset market and focus on selling high end components. The handset market for Android phones is pure hardware/ price competition which Samsung cannot win against Chinese competitors which are subsidized by their government. Samsung has left the notebook market already. Do the same for Smartphones!

12. sissy246

Posts: 7129; Member since: Mar 04, 2015

No they dont need to get out of the smartphone business, they need to stop making do many smartphones and concentrate on the S-line and Note line and maybe one mid and one low end phone.

20. strategic_developer

Posts: 1627; Member since: Jul 17, 2018

Exactly. All they need is the J for cheap, the A for mid and the S and not. 3 J models, a low end, mid and high end low range model, a low, mid and high end mid range phone and and the S and Note. Make the S in 3 flavors like the S10 will have. One flat and 2 edged at 2 sixes. The Note continues to be its premium 2nd flagship with its unique capabilities. With less phones that means less distribution cost and would actually lead to more sales. They would get more sales, because with less models, means less money to spend, which means they could charge less for phones and be more competitive in the mid to low end where they are taking the most heat in sales. The S and Nite sales certainly have fallen when you compare the highest selling S sold 70M (s4) and the highest selling Note (3) sold 35M. If Samsung wants those days, it needs to have less models with more benefit at a good price.

19. strategic_developer

Posts: 1627; Member since: Jul 17, 2018

Screw you!!! Samsung does just fine with mobile. Question how many oems sell more phones than Samsung? None. Shut up dude. You aren't a businessman, you know as much about business as I know about flying a plane. You sound stupid and hateful. The only OEMs that actually should leave the phone business is HTC and Sony because both sell less than 2M phones in a quarter. Samsung has the highest average phone sales per quarter at over 80M. No other ORM has ever had such consistent sales since Nokia died. Just stop with your Samsung hate.samung makes the eat phones in all categories based on real numbers.

3. cmdacos

Posts: 4333; Member since: Nov 01, 2016

Well done Sammy. Considerable profit growth and nice to see flagship sales growing.

10. NateDiaz

Posts: 1092; Member since: Mar 03, 2018

Thank Apple for buying their displays, changed Samsung's bum life.

11. sissy246

Posts: 7129; Member since: Mar 04, 2015

Whatever , lol Samsung would do just fine without Apple.

24. Trex95

Posts: 2383; Member since: Mar 03, 2013

iPhone XS and XS max still using Samsung OLED by the way.

6. Galaxy_Apple

Posts: 129; Member since: May 24, 2015

Hmm having been shafted by the increasing dram prices this year its clear some B.S is going on samsung's ram business went up astronomically which usually means reduced prices due to competition ,but with the help pf micron , hynix all three r keeping prices high and no one seems to be talking about it. I like samsung phones n all but the ram pricing is despicable from all 3 companies. it's total B.S.

8. KakashiHatake4444

Posts: 79; Member since: Jul 30, 2018

The only thing beating Samsung rn are the prices of their high end devices. Not that's it's a prob for me, but for the majority. If the Note 9 was priced at least $800 for the base model things would prolly look better at the end of each quarter. I honestly believe they should put more thought into their own OS so that customers can have two flavors to choose from.

21. strategic_developer

Posts: 1627; Member since: Jul 17, 2018

No! If Samsung released their own OS now on phones it would fail because of lack of support. Do you see any dev's making really good apps that support the Notes unique features? No. We dont need 3 platforms. Just 2 really good ones. The more platforms to develop for, the more time and money dev's have to spend trying to support them all and they just wont do it. If Samsung wants to have their own OS, what should have happened is, Google could have picked Samsung to be the ones and only ORM with Android and Samsung could have made a Touchwiz model and equal model just for Google with Vanilla Android. Then Samsung would be selling over 500M-800M phones per year assuming they could sustain such, which they could if they only made a few models. Samsung would have had zero competition because of no other Android OEMs. But that growth if Andeoid would have been slower as it would have taken Samsung 5 years to get to that point while having multiple OEM, got Google to a billion devices running Android in a shorter than it took Apple

13. midan

Posts: 3124; Member since: Oct 09, 2017

Been saying it a long time, Samsung can't change the direction with their mobile phones anymore. It's impossible in current smartphone market because Samsung can't compete with prices. Samsung going to sell less and less phones. http://gs.statcounter.com/vendor-market-share/mobile/worldwide/#daily-20180501-20181031 This is the reality, Apple just passed Samsung in Europe and it's just matter of time when that happens worlwide.

17. xfire99

Posts: 1207; Member since: Mar 14, 2012

You need glasses. Samsung 33.4% vs Apple 25.08% and Apple just passed Samsung? Lol? From may to OCT ONLY. NOT TOTAL!

23. Trex95

Posts: 2383; Member since: Mar 03, 2013

He’s talking about flagship not midrange or lowend phones.

27. xfire99

Posts: 1207; Member since: Mar 14, 2012

Oh yeah? Pls where in the chart says about only flagships models?

25. strategic_developer

Posts: 1627; Member since: Jul 17, 2018

Samsung can't compete with what prices? Samsung has phones from $100-$1000. They can compete on prices. Its Apple who. Ant. You got it wrong. Your own link showed Samsung has 20% of Europe vs Apple at 22%. You must be blind if you can even read your own info from the source you posted. Hahaha.

22. Trex95

Posts: 2383; Member since: Mar 03, 2013

Last week went to store checking the mate 20 Pro and the sales man told me that mate 20 Pro beats note 9 in per order.

26. strategic_developer

Posts: 1627; Member since: Jul 17, 2018

So what! A lot of phones outsell the Nite I'm sure. What exactly does that suppose to mean?

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