Samsung's Q3 operating profits drop by more than half

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

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103 Comments

1. fzacek

Posts: 2486; Member since: Jan 26, 2014

Too much money wasted on gimmicky advertising...

5. AnTuTu

Posts: 1592; Member since: Oct 14, 2012

I know they will smash the market with Note 4.

14. theman414

Posts: 132; Member since: Jun 08, 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.

31. CoastCity

Posts: 257; Member since: Mar 07, 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

32. neops

Posts: 297; Member since: Jan 28, 2014

Strategic movement to cut prices

36. Ashoaib

Posts: 3269; Member since: Nov 15, 2013

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

48. CoastCity

Posts: 257; Member since: Mar 07, 2014

Note likely tho

78. Chaseism

Posts: 82; Member since: May 08, 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.

98. Crispin_Gatieza

Posts: 3098; Member since: Jan 23, 2014

Or maybe the price of plastic skyrocketed.

80. needa

Posts: 205; Member since: Jun 30, 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".

17. iLegend

Posts: 41; Member since: Jun 05, 2013

The next big Decline is here

46. Settings

Posts: 2943; Member since: Jul 02, 2014

Yeah, Sammy is going down the Bell curve.

89. donfem

Posts: 708; Member since: Mar 30, 2011

more like idecline yea?

24. Iodine

Posts: 1471; Member since: Jun 19, 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.

37. Ashoaib

Posts: 3269; Member since: Nov 15, 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

67. gigaraga

Posts: 1454; Member since: Mar 29, 2013

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

76. Martin_Cooper

Posts: 1774; Member since: Jul 30, 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?

88. letosaw

Posts: 135; Member since: Aug 05, 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

96. Ashoaib

Posts: 3269; Member since: Nov 15, 2013

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

74. Pattyface

Posts: 1658; Member since: Aug 20, 2014

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

83. QWIKSTRIKE

Posts: 1457; Member since: Mar 09, 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".

64. Sonar

Posts: 14; Member since: Jul 01, 2014

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

72. frederick333123

Posts: 76; Member since: Jun 15, 2013

no you dont...

75. funnyguy

Posts: 244; Member since: Jan 10, 2013

F**ck the Galagy Note 4.

90. donfem

Posts: 708; Member since: Mar 30, 2011

Waste of space

97. gigaraga

Posts: 1454; Member since: Mar 29, 2013

Let ALL the butthurt flow through.

99. InspectorGadget80 unregistered

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

19. LiyanaBG

Posts: 381; Member since: Nov 07, 2013

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

40. Ashoaib

Posts: 3269; Member since: Nov 15, 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

23. cncrim

Posts: 1571; Member since: Aug 15, 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.

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