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Samsung is still the only phonemaker to approach Apple in terms of profitability

Apple, Inc. (AAPL) set perhaps too high a bar with years of gaudy growth, new products and record products.  Now, even as it earns an epic $13.1B USD, it saw shares hammered as a result of shrinking margins and questions of legacy.

For Apple's arch-rival Samsung Electronics Comp., Ltd. (KSC:005930), which just posted its earnings last night, the story was a bit of the same.  Samsung recorded a record profit of $6.54B USD (7.04T won), or almost precisely half of the profit Apple made for the quarter.  That profit marks a rise of 76 percent from a year ago, and narrowly bests analyst predictions of $6.39B USD (6.87T won).

It mustered record profitability, despite some bad news.  Margins "fell to 17.4% in the fourth quarter, down from the 18.8% marked in the previous quarter".  Additionally, Samsung saw cell-phone sales grow 58 percent, which might seem impressive were that not a fall from last year's eye-popping 82 percent growth.

Samsung raked in $51.12B USD (56.06T won) in total revenue, up 18 percent from a year before.  Revenue was roughly in line with the analyst prediction of 56.22T won.  The profit-driving telecom business accounted for 62 percent of the company's operating profit.

Samsung Galaxy S III
Samsung moved an estimated 60 million smartphones and set a profit record in Q4 2012.
[Image Source: Funny Tweek]

Analysts estimate that Samsung moved around 60 million smartphones worldwide for the quarter, up from 36.5 million smartphones a year ago.  The surge comes thanks to strong continued growth of the Galaxy brand of smartphones and mini-tablets.  Samsung maintained a narrow lead over Apple in sales (Apple moved 47.8m iPhones), despite the strong relief of pent-up demand brought by the release of the iPhone 5.

The most troubling news for Samsung was how a strengthening South Korean won might hurt Samsung's profitability in 2013.  Samsung estimates that up to 3T won ($2.79B USD) could be trimmed of its profits in 2013.  Exactly how much that hurts Samsung depends a lot on how much it continues to grow.

Korean Won
A strengthening won is bad news for Samsung. [Image Source: 
SeongJoon Cho/Bloomberg]

Shares fell to a two-month low on news of the dipping margins and currency issues.  But ultimately, traders may be spooked not only by these numbers, but also by the performance of Samsung's archrival Apple.  Comments Standard Chartered Plc analyst Sean Kim to Bloomberg, "The stronger won will obviously have a negative impact on profit, but that isn’t Samsung’s only concern.  Apple’s unimpressive earnings also indicate that the overall market situation is becoming more difficult."

In short, investors fear a weakening phone market and as a results are scrutinizing the market's top players (Samsung and Apple) more carefully.  Interestingly, the most positivity appears to be channeled towards Nokia Oyj. (HEX:NOK1V) who achieved profitability after 6 quarters of losses.  While Nokia moved only 4.4m Windows Phones -- or about 1/14th of Samsung's unit sales -- the small, lean company is attracting attention in the troubled market.

Still, it might be unwise to overlook Samsung.  The company has a very diverse business base, and finds ways to achieve profitability even in the most adverse of circumstances.  For example, in Q4 its semiconductor division leveraged higher prices on component DRAM for smartphones and servers to offset weak pricing on the PC front due to overproduction.

Sources: Samsung [PDF], FT [analyst estimates]



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of mice and men
By Nortel on 1/25/2013 12:12:55 PM , Rating: -1
quote:
Apple’s unimpressive earnings also indicate that the overall market situation is becoming more difficult."


Apple posts $13.1B earnings (the most profitable quarter in tech company history) to Samsung's $6.54B. Apple posts a 38.6% margin compared to Samsung's 17.4%. Samsung doesn't even post the number of phones sold but last year was only 36.5 million. If Apple sold TV's or the plethora of various products like Samsung does you can imagine where Apple could be heading.

Apple's P/E is only 10!!! Almost the same as Samsung,which is insane given the numbers above and Apple's cash hoard.




RE: of mice and men
By retrospooty on 1/25/2013 12:25:19 PM , Rating: 5
"Apple Apple Apple Apple Apple Apple"

Arent you just repeating what Tony already said?

Seriously, you two need a hobby, or something to occupy your time other than just Apple.


RE: of mice and men
By Samus on 1/25/2013 12:59:49 PM , Rating: 2
Apple is near a 52-week low. Maybe they could buy some of Dear Empire.


RE: of mice and men
By retrospooty on 1/25/2013 1:38:26 PM , Rating: 3
"Apple is near a 52-week low. Maybe they could buy some of Dear Empire"

I believe they refer to it as "Precious" ;)


RE: of mice and men
By messele on 1/28/2013 4:53:00 AM , Rating: 2
They may need a hobby (actually they DO need a hobby). But what is far sadder is the boring predictability is where there is a Swash post moments later there is spooty post.

Being an Apple fanboy is one thing but at least it's a positive. Sad. But positive. Being somebody like you is far sadder, tragic perhaps.


RE: of mice and men
By Cheesew1z69 on 1/28/2013 8:26:54 AM , Rating: 1
Being a apple fanboy is positive? LOL

You, are sad, and not only sad, but sad and pathetic. Pathetic beyond words.


RE: of mice and men
By retrospooty on 1/28/2013 11:38:51 AM , Rating: 2
So posting 1/2 truths and leaving out details with the specific intent of making a company appear better than they are is positive... And me calling them on it when I see it is not? OK, I get it, you're another tool.


RE: of mice and men
By Rukkian on 1/25/2013 12:35:42 PM , Rating: 2
I give you an F for reading comprehension, but since it does not help make apple look good, I am not shocked coming from you.

quote:
Samsung doesn't even post the number of phones sold but last year was only 36.5 million.


Here is from the article you are supposedly responding to:

quote:
Analysts estimate that Samsung moved around 60 million smartphones worldwide for the quarter, up from 36.5 million smartphones a year ago.


RE: of mice and men
By retrospooty on 1/25/2013 12:46:28 PM , Rating: 2
When one starts with the premise of trying to Make Apple look better on a story that isn't even about Apple, its easy to overlook things like lines of text, and other various random things like facts. It's one of the downsides of having a company based agenda ;)


RE: of mice and men
By Nortel on 1/25/2013 2:03:46 PM , Rating: 1
quote:
Samsung doesn't even post the number of phones sold

vs
quote:
Analysts estimate that Samsung moved around 60 million smartphones


Analysts can pull numbers out of their a$$, if it isn't a published number by Samsung, the number is meaningless. For Samsung not to release phone sales numbers is an insult to its investors.


RE: of mice and men
By retrospooty on 1/25/2013 2:33:43 PM , Rating: 4
Will it help you if we all just give in and say "Apple is the best in all things" and be done with it?

FFS, you cant even read an article about Samsung's quarterlies without getting all bendt out of shape about Apple. Seriously, WTF is wrong with your head regarding that company?


RE: of mice and men
By ritualm on 1/27/2013 2:57:00 AM , Rating: 1
You should quit sucking off Tim Cook before he unloads his poisonous spooge into your... oh wait, you have already superglued your lips over his pecker.


RE: of mice and men
By ilt24 on 1/25/2013 2:03:21 PM , Rating: 2
quote:
Samsung doesn't even post the number of phones sold


According to a company called Strategy Analytics:

Global Smartphone Vendor Shipments (Millions of Units) Estimates for Q4 2012

---------- Q4 '11 - 2011 - Q4 '12 - 2012
Samsung 36.5 - 97.4 - 63.0 - 213.0
Apple--- 37.0 - 93.0 -- 47.8 - 135.8
Nokia--- 19.6 - 77.3 --- 6.6 --- 35.0
Others-- 63.9 - 222.8 - 99.6 - 316.3
Total-- 157.0 - 490.5 - 217.0 - 700.1


RE: of mice and men
By messele on 1/25/2013 2:14:28 PM , Rating: 2
How thick are you people?

He argues that Samsung doesn't announce their unit sales figures.

Time after time you pull analytics company after analytics company figures out of your arseholes and put that forward as proof that they do?

You're proving his point by doing this you idiots. Read what he said word. by. word and try and comprehend a simple fact before rushing to get your entry in for the 2013 derp awards.


RE: of mice and men
By ilt24 on 1/25/2013 3:46:25 PM , Rating: 2
Since you liked my first reply so much, here are some numbers for total handsets.

Global Handset Shipments and Market Share Estimates for Q4 2012

----------- Q4 '11 - 2011 - Q4 '12 - 2012
Samsung -- 95.0 - 327.4 - 108.0 - 213.0
Nokia ----- 113.5 - 417.1 - 86.3 - 35.0
Apple ----- 37.0 -- 93.0 -- 47.8 -- 135.8
ZTE -------- 24.4 - 78.1 -- 19.5 --- 35.0
TCLAlcatel - 12.5 - 39.7 - 12.4 --- 39.5
Others ---- 157.2 - 590.7 - 176.9 - 595.9
Total ---- 439.6 - 1546.0 - 450.9 - 1575.0


RE: of mice and men
By ilt24 on 1/25/2013 3:48:58 PM , Rating: 2
<oops>

Since you liked my first reply so much, here are some numbers for total handsets.

Global Handset Shipments and Market Share Estimates for Q4 2012

----------- Q4 '11 - 2011 - Q4 '12 - 2012
Samsung -- 95.0 - 327.4 - 108.0 - 213.0
Nokia ----- 113.5 - 417.1 - 86.3 – 335.6
Apple ----- 37.0 -- 93.0 -- 47.8 -- 135.8
ZTE -------- 24.4 - 78.1 -- 19.5 --- 71.7
TCLAlcatel - 12.5 - 39.7 - 12.4 --- 39.5
Others ---- 157.2 - 590.7 - 176.9 - 595.9
Total ---- 439.6 - 1546.0 - 450.9 - 1575.0


RE: of mice and men
By retrospooty on 1/25/2013 4:26:12 PM , Rating: 2
Here is a link that is easier to read. (just smartphones)

http://www.androidauthority.com/smartphones-shippe...


RE: of mice and men
By messele on 1/28/2013 4:54:55 AM , Rating: 1
So you try and disprove my point by pulling out the same analytics shite.

Joint Derp awards for the both of you.


RE: of mice and men
By Cheesew1z69 on 1/28/2013 8:28:29 AM , Rating: 2
Your mother should have swallowed... then you wouldn't have such a pathetic, miserable life.


RE: of mice and men
By retrospooty on 1/28/2013 10:27:20 AM , Rating: 2
I was just putting up what #'s are available, not trying to "disprove you" you narcissistic putz...

What point are you even trying to make here? That Apple is outselling Samsung? They arent, not even close. If your point is just that Samsung doesnt publish exact #'s then fine. You are correct. Who gives a crap. It's not like it matters, but of course, Apple is mentioned in a "not glowing" light , so you have to get all butt-hurt.


RE: of mice and men
By Tony Swash on 1/25/13, Rating: 0
"It looks like the iPhone 4 might be their Vista, and I'm okay with that." -- Microsoft COO Kevin Turner














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