Samsung reports lower quarterly earnings for the first time in two years

Samsung reports lower quarterly earnings for the first time in two years
For the first time in two years, Samsung reported lower quarterly earnings. Led by softer sales of smartphones, the Korean tech titan reported operating profits of 8.3 trillion won ($7.7 billion USD) for the quarter. The company took a 800 billion won hit ($745 million USD) to pay a special employee bonus that was given to commemorate the 20th year since Chairman Lee Kun-hee's restructuring, which turned the company around. A stronger won also resulted in fewer won received for each U.S.Dollar in sales, and that removed 700 billion won ($650 million USD) from the bottom line. 

Operating profit for Samsung's gilded-edge mobile division was flat at 5.47 trillion won ($5.08 billion USD), from a year earlier. On a sequential basis, the figures were off 18% from the record 6.47 trillion won ($6 billion USD) operating profit seen in the previous quarter. Analysts blamed strong sales of the Apple iPhone for Samsung's decline in mobile operating profits during the fourth quarter.

With displays earmarked for the Samsung Galaxy S4 sitting in the warehouse collecting dust, Samsung Display saw operating profit decline 90% to 110 billion won ($100 million USD). Samsung's flagship Android phone sold fewer units than estimated, resulting in a number of screens sitting by idly.

source: Reuters

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48 Comments

1. nokia12

Posts: 610; Member since: Nov 19, 2013

time for Sony and LG to rise... waiting for great results from Sony due to z1 and z ultra sales...

2. nokia12

Posts: 610; Member since: Nov 19, 2013

also add xperia m which became second best seller after lumia 520 in low end

5. PapaSmurf

Posts: 10457; Member since: May 14, 2012

Both models leave 0 room for profit, which in the end is the ultimate goal of a company.

15. nokia12

Posts: 610; Member since: Nov 19, 2013

I wasn't talking about profitability when talking about xperia m .. I was talking about units sales ... z1 and z ultra will push profitability.. xperia m is a 210$ device not exactly 0 margin profit device even moto g makes some profit this is lowered speced than moto g so it should be making even more profit. although a small one., high volume might cover it up.. Sony has other departments especially tv and camera business which are struggling that will have a major impact in their profitability. ps4 sold big numbers so game sales of ps4 should push gaming profitability even higher this quarter...

28. PapaSmurf

Posts: 10457; Member since: May 14, 2012

Comment still stands.

41. SandraB

Posts: 75; Member since: Aug 07, 2013

Samsung must pay licenses to microsoft for Android Nokia Microsoft will now avoid paying licenses for Android. Then microsoft take out licenses for this Linux variant. Really wonder if China and India, with nice big manufacturers like Huawee and Micromax will allow the deal between Microsoft and Nokia. Will India and China regerinar really allow the store when the risk to knock out their entire phone industry? It's not fair if microsoft nokia avoid paying licenses

40. SandraB

Posts: 75; Member since: Aug 07, 2013

WP is a joke ,dont sell.

4. maherk

Posts: 6931; Member since: Feb 10, 2012

Ha, haa.

7. Isitforyou

Posts: 11; Member since: Jan 19, 2014

Agree Sony, LG, HTC, Oppo, should do well this year. Enough of Samsungs cheap plastic. But specs are great by Samsung, which they believe in.

18. PapaSmurf

Posts: 10457; Member since: May 14, 2012

Same has been said since 2011.. Sounds like a broken record.

27. androiphone20

Posts: 1654; Member since: Jul 10, 2013

True, only this time around OEMs like oppo are making good smartphones like the Find 7, LG and Sony are really stepping up their game so the S5 is up for some steeper competition. In the low-end department a lot of OEMs are rising too, Motorola is doing well and people who care less about a $700 smartphone are going for devices like the nexus line

29. PapaSmurf

Posts: 10457; Member since: May 14, 2012

Only OEM I see next year climbing is either Sony or LG. Everyone else is going to stay where they're at. Moto is looking good btw.

42. Tsepz_GP

Posts: 1176; Member since: Apr 12, 2012

Don't get your hopes up :D Sony Z Ultra was barely a hit, and the Z1 hasn't seen the sort of success the Z did, Sony would have told us if it did. Expect Sony to make a profit in gaming and financial activities. Us logic, if Samsung were hit by higher iPhone sakes then that causes a ripple effect, the rest of the Android OEMs probably also had a rough quarter.

3. PBXtech

Posts: 1032; Member since: Oct 21, 2013

Still a considerable amount of profit. If the S5 is as good as expected, should be a good year for them in 2014.

6. PapaSmurf

Posts: 10457; Member since: May 14, 2012

Hopefully it's LTE-A capable so when T-Mobile upgrades their LTE network this year, it'll be ready.

12. g2a5b0e unregistered

Of course it will be. The Note 3 is LTE-A capable. Almost positive the G2 is as well.

21. PapaSmurf

Posts: 10457; Member since: May 14, 2012

Is it really? I thought it wasn't. John Legere spoke about the carrier hitting max data speeds of over 150mbps, so LTE-A this year is going to kick ass.

26. g2a5b0e unregistered

It is. Samsung has been including it in all of their Snap 800 devices since the LTE-A S4 came out in S. Korea last June. It will kick ass. I can't wait. http://www.phonearena.com/news/Report-5.7-inch-screen-LTE-A-connectivity-for-the-Samsung-Galaxy-Note-3_id44963

32. PapaSmurf

Posts: 10457; Member since: May 14, 2012

This news is better than the news I got from my professor in passing my exam with a 100 lol. Good guy Samsung for making their phones futureproof.

31. g2a5b0e unregistered

Did a little research. The G2 does support it. The Nexus 5 & 7 are the only other devices on T-Mobile that currently do as well.

33. PapaSmurf

Posts: 10457; Member since: May 14, 2012

Nexus 7? S4 Pro has LTE-A capabilties? Is it modified since other phones don't support it?

34. g2a5b0e unregistered

Sorry, I was confusing LTE-A & Category 4 LTE devices, which are ones that support 20+20 LTE (wide band). The Note 3 & G2 are both, while the Nexus 7 is only the latter. I'm not sure if the Nexus 5 is LTE-A capable, but it's definitely Category 4.

35. PapaSmurf

Posts: 10457; Member since: May 14, 2012

I know all flagships in 2014 are going to be wideband capable (S5, Z1S). With T-Mobile pushing VoLTE aggressively to eliminate 2G from the nation, speeds are only going to get better and better. Thanks to the 700MHz Block A spectrum purchased from Verizon, T-Mobile will remain the fastest LTE network in 2014.

36. g2a5b0e unregistered

No doubt about it. That gap will only widen too. I've been a T-Mobile customer for over 10 years now. They've never given me a reason to leave, but recently, they've been giving me lots of reasons to stay. I love it.

8. nctx77

Posts: 2540; Member since: Sep 03, 2013

The S5 will have some serious competition this year from both other Android hand sets and Apple. HTC, Sony and LG are not playing. Added in Lenovo and other Android manufactures making noise, Samsung is finding it increasingly hard to keep it number one status and differentiate it self. Add in an early release of a large screen iphone and a phablet later in the year and you will continue to see articles like this. Everybody will have big screens, 2k res, fast processors, etc.

10. Napalm_3nema

Posts: 2236; Member since: Jun 14, 2013

No, not really. Are they stumbling? A bit. Are they hurting? Not by a long shot, when they collected around 53% of all mobile profit. That means Sony, Google, LG, Motorola, HTC, etc. collected -9% of all mobile profit (Yes, collectively, they lost money, although Sony and LG saw small profits individually), since Apple collected the other 56%.

13. nctx77

Posts: 2540; Member since: Sep 03, 2013

Those are hard numbers. I'm looking at momentum. HTC One didn't sell no where near as much as the S4, but what it did do is create a buzz much like the Initial Galaxies did. Now, people are intrigued and waiting on the second edition. The same can be said for other manufactures. Sammy hasn't dealt with that in a while. Before, it was just a bunch of phones with not one really standing out. HTC, Sony, LG, etc have really created some nice momentum in 2013. Most in the Android camp have been rocking Galaxies for a while now. They want something different. It's the same thing Apple went through.

16. taz89

Posts: 2014; Member since: May 03, 2011

Don't think HTC created much buzz, imo out of all the oems I think Sony and LG have the best chance and HTC just can't gather steam and they just are not making enough money to keep up the marketing and hence create and maintain buzz. The problem here for people predicting Samsung demise is that Samsung just make too much money and even there worst quarter is like better than others best better quarters.. It all comes down to money, Samsung make profits in billions, the others are making millions when they make a profit. For anyone to suddenly over take samsung it would mean samsung will have to be losing tens of millions of sales a quarter with at the same time others increased tens of millions each quarter. If we looking at the US the likes of HTC, moto etc lost market share while Samsung increased. My point is that not that Samsung will never go down but this 1 drop I sales in 2 years is not a sign of demise. Samsung need to be losing in every quarter this year to be considered a demise. Also 750million was used up for bonus Payment so that's a huge chunk, that's more than HTC, Sony, LG, moto made this year in profit so I think anyone (not you) saying this is the death of Samsung are being very sort sighted

22. PapaSmurf

Posts: 10457; Member since: May 14, 2012

Took the words out of my mouth. +1

49. PBXtech

Posts: 1032; Member since: Oct 21, 2013

Samsung makes the internal components others need. When the rest can do that, they'll be as strong as Samsung. Until then, they're buyers of those components, advantage Samsung.

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