Samsung’s yearly profits up 27% after strong mobile growth

by: Robert TriggsJanuary 24, 2014

Samsung Brand Shots CES 2014-3

It’s the time of the year when companies publish their earnings reports for the previous year. Most recently Samsung took its turn to let investors know how the company has performed throughout 2013, and it appears that Samsung is having some mixed fortunes.

Samsung’s financial report shows, as predicted, that the company’s fourth quarter operating profit held steady compared with Q4 2012, quarter on quarter profits fell slightly, whilst yearly operating profit rose by 27%.

Despite the fall in quarterly operating profit, Samsung’s Q4 2013 sales revenue was actually up by just over 3 trillion Won ($2.8 billion) compared with Q4 2012, and yearly sales grew by a very healthy 27.6 trillion Won ($25 billion).

Looking more specifically at the company’s mobile operations, year on year revenue was up a very healthy 32%, however going from Q3 to Q4 2013 Samsung’s mobile sales actually declined by 9%. A slightly worrying sign considering that Q4 is usually a time when consumers are willing to spend a little more money.

Samsung sales and profits 2013

Operating profit was even worse off, suffering an 18% decline in the mobile communications department during the fourth quarter. However, Samsung was keen to explain that this decline in profitability was more a result of marketing costs and “year-end inventory adjustments” which lowered shipments and affected profits. Samsung points out that its smartphone and tablet sales are stronger than ever, and on a year by year basis that is certainly the case.

In future Samsung is aiming to curb its marketing costs in order to realise a greater profit on its growing mobile sales. Senior Vice President Kim Hyunjoon told analysts that:

we will try to raise the efficiency of our marketing spend and lower our overall mobile marketing budget to revenue this year compared with last year

Mr Hyunjoon believes that one way to do this may be to obtain coverage through sponsoring global sports events, such as the Sochi Winter Olympic games, rather than by direct marketing. We’ll have to wait and see exactly what this means for this year’s upcoming devices.

Overall 2013 was another positive year for Samsung, and with the Galaxy S5 waiting just around the corner 2014 will likely be another financially strong year.

  • Jayfeather787

    Great for Samsung. I wonder how it Motorola doing, with their new Moto X and Moto G and other phones that they released.

  • JonDuke19

    Maybe people are finally understanding that Samsung makes a bad UI and their hardware is not better than others and so they are moving on to real adult phones.

    Samsung fan boy about to snap… wait for it….

    • Jaun Lombard

      Clearly you dont know phones…even the biggest Samsung haters
      will say Samsung’s hardware is the best…just look at the Note 3…still the best speced phone on the market even though new phones were launched at CES 2014. (The only feature on a phone that is better than the Note 3 is SONY’s 21 Megapixel Camera Z1)

      Samsung’s UI is not bad…just bloated…

      • Azeem

        Actually, the 21 MP shooter on the Z1 is worse than the one on the Note 3.

      • Guest123

        You must be ignoring Nokia. . . still the best phone cameras on the planet — with they would have adopted Android.

    • Shark Bait

      Talk about prodding a fan boy with a stick lol!!

    • Guest123

      Well, the only samsung device I’ve had is the GSM Galaxy Nexus, and it still works perfect. Have had many other samsung products and one thing seems consitent, their lower end stuff is usually crap while their higher end stuff is usually among the best in category. . . but they can’t write decent software on anything.

    • Tuấn Ankh

      “real adult phones”
      Like one that can access porn sites really quickly? ;)

  • apianist16

    Annnd next year the S6 will be coming out so they will have another financially strong year. ;)