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Samsung meets quarterly financial guidance, profits continue to fall

updated 09:35 pm EDT, Mon April 28, 2014

Revenue slips nine percent, gains from same time last year

Samsung Electronics today announced revenues of 53.68 trillion Korean won ($51.8 billion) on a consolidated basis for the first quarter ended March 31. Samsung's revenue slipped nine percent quarter-on-quarter, but saw gains compared with the same period last year. For the quarter, the company posted consolidated operating profits of 8.49 trillion won ($8.17 billion), representing a two percent increase on-quarter. Consolidated net profit for the quarter increased by 270 billion won to 7.57 trillion won ($7.29 billion).

Samsung's Semiconductor businesses posted 1.95 trillion won ($1.88 billion) in operating profits for the quarter on 9.39 trillion won ($9.04 billion) in consolidated revenue. The memory chip business alone recorded the bulk of sales, with 6.29 trillion won ($6.05 billion) in revenue, a three percent decrease in gains quarter-on-quarter.

The Display Panel segment posted revenues of 6.10 trillion won ($5.87 billion) in the first quarter with an operating loss of 80 billion ($77 million) won amid traditionally weak seasonal demand. During the first quarter of 2014, the overall LCD market experienced a decline in demand for TV and tablet panels as product makers reduced orders.

The IT & Mobile Communications division consisting of Mobile Communications and Networks posted operating profits of 6.43 trillion won ($6.19 billion) on 32.44 trillion won ($31.23 billion) in revenue for the March quarter. Out of the total earnings, the mobile business was responsible for 31.36 trillion won ($30.19 billion). Although market demand for both smartphones and tablets decreased during the first quarter, operating profits for the IM division jumped 18 percent compared with the previous quarter thanks to steady smartphone shipments.

The Consumer Electronics Division encompassing the Visual Display, Digital Appliances, Printing Solutions and Health and Medical Equipment businesses posted an operating profit of 190 billion won for the quarter on revenues of 11.32 trillion won ($10.9 billion). The Visual Display business accounted for 7.39 trillion won ($7.11 billion) of earnings. Seasonally low demand for consumer electronics goods during the first quarter corresponded with the division's overall sales down by 21 percent.

Samsung is expected to see profits rally in the second quarter and beyond, on the back of improved sales of display panels and home appliances. Orders for display panels that are used for premium smartphones and TVs are expected to increase, as new mobile devices are rolled out into the market. The outlook for household appliances will also pick up on seasonal demand for air conditioners, as well as orders for high-end TVs.

by MacNN Staff



  1. iphonerulez

    Dedicated MacNNer

    Joined: 11-28-08

    The main problem when a company pursues market share at every price point, if the high-end sales go soft, the low end drags the company's profits down. That's why I'm not sure why Wall Street thinks dominating market share using low-priced products is such a wonderful idea. Having high market share is very deceiving to investors. High market share has its own risks. Case in point, the once mighty cellphone giant, Nokia. All those tens of millions of third-world, low-cost cellphones became an anvil around Nokia's neck. All the market share in the world wouldn't help once a company's most profitable products fail to sell.

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