Samsung Sets Profit Record, but Growth, Margins Suffer Slightly
January 25, 2013 11:56 AM
comment(s) - last by
Samsung is still the only phonemaker to approach Apple in terms of profitability
Apple, Inc. (
) 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. (
), which just posted its earnings last night, the story was a bit of the same. Samsung
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
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 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.
A strengthening won is bad news for Samsung. [Image Source:
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
, "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
) 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.
FT [analyst estimates]
This article is over a month old, voting and posting comments is disabled
RE: of mice and men
1/28/2013 4:53:00 AM
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
1/28/2013 8:26:54 AM
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
1/28/2013 11:38:51 AM
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.
"Folks that want porn can buy an Android phone." -- Steve Jobs
Nokia Releases Earnings, Confirms It's Now Profitable
January 24, 2013, 11:15 AM
Apple Earnings Worry Investors; Stock Falls 10 Percent
January 23, 2013, 7:06 PM
Samsung Racks up Record Profit Thanks to Galaxy S III, Galaxy Note II
January 8, 2013, 9:17 AM
Samsung is Virtually Tied With Apple, Sells 36.5M Smartphones in Q4
January 27, 2012, 10:29 AM
Smart Security Cameras: 5 Good Choices For Any Budget
July 25, 2016, 7:13 PM
Top 5 Smart Watches
July 21, 2016, 11:48 PM
Retiree Sues Apple For $7,500 for Wiping Honeymoon Photos From His iPhone
November 30, 2015, 10:23 AM
iPhone 7 May Pack 3-4 GB Memory, More Storage; 4-Inch Comeback is Rumored
November 20, 2015, 10:12 PM
OnePlus One, OnePlus 2 Will Receive Android Marshmallow in Q1 2016
November 16, 2015, 9:58 AM
Lenovo Whoa: Motorola Droid MAXX 2 and Turbo 2 Break Cover in Leaks
October 26, 2015, 3:12 PM
Most Popular Articles
Say Goodbye to Data Plans - Sprint and T-Mobile offer Unlimited Data
August 22, 2016, 6:12 AM
Get Ready to wait in line – iPhone 7 due September.
August 18, 2016, 7:15 AM
Lenovo vs. Asus vs. HP - Best Laptop Under $500.00
August 19, 2016, 4:00 AM
5 Healthy and Creative ways to add Fiber to your Diet By Monique C. Bethell, Ph.D.
August 18, 2016, 7:43 AM
Uber - Everyone's Autonomous Car Driver?
August 20, 2016, 6:01 AM
Latest Blog Posts
SolarCity’s Gigafactory: A Milesone in Emerging Technology by Lily Emamian - 15 August 2016
Aug 15, 2016, 6:30 AM
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information