Samsung Q4 earnings to miss forecast, smartphones and memory chips culprits

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Samsung is attempting to shore up margins for its premium smartphones while attempting to keep its stronghold of the mid-range mobile market with a revised strategy. The company did well last quarter, but how this past quarter’s strategy failed to meet the banks’ targets is not going to bode well for the path going forward.

Q4 operating profit was up 15.3 percent year-over-year to ₩6.1 trillion ($5.1 billion). Interestingly, these numbers are down 17.5 percent from the sequential Q3. Market consensus was pegged at ₩6.5 trillion ($5.4 billion). Sales totaled 53 trillion ($44.3 billion) for the quarter, 0.5 percent better than last year.

On the whole, annual sales were down 2.9 percent from 2014, but were also good enough to keep above the ₩200 trillion threshold for the fourth year in a row. Operating profit was up 5.4 percent.

Samsung Electronics stock on the Korean stock market as of this post is up about 0.75 percent, though, after general market volatility in Asia that has spread globally.

The banks are expecting the semiconductors unit to post a 12 to 14 percent decline in operating profits from a record third-quarter. Operating profits for the IT and smartphone units together are forecast to drop by somewhere in that range as well.

Also, with Apple acting as a sort of bellwether, analysts are suggesting a cooler market for smartphones overall.  Furthermore, while the bet is that Samsung sold a healthy 80-million-plus units, the proportion of low-margin budget models will continue to grow along with marketing costs.

Source: Korea Herald

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About The Author
Jules Wang
Jules Wang is News Editor for Pocketnow and one of the hosts of the Pocketnow Weekly Podcast. He came onto the team in 2014 as an intern editing and producing videos and the podcast while he was studying journalism at Emerson College. He graduated the year after and entered into his current position at Pocketnow, full-time.