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

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26 Comments

1. twens

Posts: 1173; Member since: Feb 25, 2012

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

15. phonearenarocks

Posts: 606; Member since: Mar 26, 2015

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

21. Techist

Posts: 311; Member since: Jan 27, 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/

18. Well-Manicured-Man

Posts: 674; Member since: Jun 16, 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.

2. yoosufmuneer

Posts: 1518; Member since: Feb 14, 2015

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

12. Hexa-core

Posts: 2131; Member since: Aug 11, 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.

22. mrochester

Posts: 978; Member since: Aug 17, 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.

3. Jason2k13

Posts: 1460; Member since: Mar 28, 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.

5. TheBiz

Posts: 232; Member since: Apr 13, 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

7. rishav20193

Posts: 241; Member since: Jul 18, 2015

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

10. Hallyu

Posts: 790; Member since: Jul 21, 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.

4. manojmcn

Posts: 633; Member since: Jul 16, 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.

6. Shocky unregistered

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.

8. rishav20193

Posts: 241; Member since: Jul 18, 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.

9. Hallyu

Posts: 790; Member since: Jul 21, 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.

11. UglyFrank

Posts: 2193; Member since: Jan 23, 2014

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

13. Hexa-core

Posts: 2131; Member since: Aug 11, 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!

14. Napalm_3nema

Posts: 2236; Member since: Jun 14, 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.

16. UglyFrank

Posts: 2193; Member since: Jan 23, 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.

17. UglyFrank

Posts: 2193; Member since: Jan 23, 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.

19. Well-Manicured-Man

Posts: 674; Member since: Jun 16, 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.

23. mrochester

Posts: 978; Member since: Aug 17, 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 :)

26. tedkord

Posts: 17318; Member since: Jun 17, 2009

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

20. ameran

Posts: 344; Member since: Dec 04, 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.

24. cripton805

Posts: 1485; Member since: Mar 18, 2012

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

25. obedchuni

Posts: 333; Member since: Jun 16, 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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