It’s not all ups: Samsung to post first declining profit in 9 quarters

January 8, 2014
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Samsung-Galaxy-Note-3---top-bezel-logo

For the first time since the third quarter of 2011, Samsung will post a quarter of declining profits. Samsung’s results for Q4 2013 will miss analysts’ estimates, due to slowing sales in the mobile business and massive year-end bonuses paid to employees.

Samsung’s guidance for Q4 2013 pegs an operating profit of $7.8 billion, down 18 percent from the quarter before and eight percent from the same time last year. The guidance misses the average forecast of analysts interviewed by Bloomberg and Reuters. Sales were up, but the quarter on quarter growth of 5.3 percent was the slowest since Q3 2011, despite traditionally strong results this time of the year.

Analysts from Daewoo Securities estimate that Samsung shipped 13 million units of its flagship Galaxy S4 in Q4, down from 17 million in the previous three months. An estimate from KB Investments & Securities puts the total number of smartphones shipped in Q4 at 91 million units.

Sanford C. Bernstein’s analyst Mark C. Newman highlighted that despite softer sales, Samsung still has a lot of good things going on – for one, the Korean company is “the only company in the world that is actually making money on low-end smartphones right now”, noted Newman.

Samsung paid workers a cumulated bonus of $657 million at the end of 2013, a record sum doled out to celebrate the 20th anniversary of the famous New Management initiative that set Samsung on course to becoming the biggest consumer electronics company in the world.

Comments

  • MasterMuffin

    Poor Samsung, how can they manage with only a profit of 8 billion

    ;)

    • Jason Yuen

      Queue the next Apple lawsuit to try to bring that down to 7.

    • Erik

      poor people, who do not understand capitalism and any profit is a good thing, which in return lets companies hire thousands of people which makes their lives better.

  • pritish

    I wonder who will be the next no.1?
    :-/

    I wish Sony will

    • apianist16

      Next No. 1? As far as I know, no one else is even close, either in terms of phone sales or profit. Doesn’t mean that I would buy their products, but I respect the fact that they have succeeded where many others haven’t.

  • Mike H

    They are cranking out new models too fast. Consumers have “upgrade whiplash.”