Samsung disappoints investors despite record $8.3 billion profit

By on July 5, 2013, 9:44 AM
samsung, earnings, galaxy s 4

It’s not easy living up to expectations when you are consistently delivering stellar results and competing for the top spot of the market. We’ve seen it happen with Apple’s declining share price, despite the iPhone and iPad still selling like crazy. Now Samsung has apparently let down investors while seeing its highest-ever revenue and profit in a quarter, estimated at $49.9 billion and $8.3 billion respectively in their early guidance numbers.

Such profit represents a 47% year on year rise as well as 54% growth compared to last quarter. But Reuters reports that investors hoped to see profit closer to $8.89 billion, meaning Samsung’s early figures are 6.4% below expectations. Final earnings results should land July 26 but they shouldn’t differ too much from this.

Apparently concerns center on slowing growth and shrinking margins at the high end of the smartphone market. Analysts talking to Reuters and Bloomberg also cite disappointing sales of the Galaxy S 4. Although it easily became the fastest selling Android device ever, the increased expenses in marketing and distribution channels weren’t justified in investors’ eyes as it still wasn’t able to outpace Apple’s iPhone 5 launch figures.

Samsung sells more smartphones than anyone else when adding up the full range of devices it offers, though.

Of course, smartphones are just one part of the picture. Samsung also holds the lead in the memory chip market, which is expected to remain strong, and its component business is also doing well. But Apple’s lessening reliance on the South Korean firm for iPhone and iPad parts should give investors another thing to worry about.




User Comments: 12

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Guest said:

I don't get it.

wastedkill said:

Really... how sad are these people... "Oh let me cry about that 6.4% we was wrong about then lets cry some more over how I am disappointed in my investment doing a record breaking profit.

Then lets also cry some more over how my investment is doing better than ever because lets be honest as a investor I only want my investment to do worse than ever and loose me money... cry cry cry cry cry"

Skidmarksdeluxe Skidmarksdeluxe said:

I get it. It's the age old adage, greed begets greed. The investors will never have enough money to make them happy.

1 person liked this | cliffordcooley cliffordcooley, TechSpot Paladin, said:

I get it. It's the age old adage, greed begets greed. The investors will never have enough money to make them happy.
You have that right.

Investors are what I call legal thieves. Anything over a 20% profit in return is extortion in my book. But then thats not likely to change because its the same people doing the investing and creating our laws.

Guest said:

Rich people problems.

Guest said:

Those retards are turning this into another Apple-like balloon. And they are supposed to be knowledgeable?

Could someone make a law for shooting investors in the nuts with a shotgun when they complain about record profits?

Archean Archean, TechSpot Paladin, said:

Its not just about 'investor greed', but rather more about dangers of 'Galaxy S' fatigue, since, it too just like iPhone, starting to feel like a tired brand (e.g. S4 is rather an update, then an upgrade and everything Galaxy mantra). Hence, the probability that Sammy may have already peaked. Obviously, it doesn't mean Samsung will be going anywhere any time soon, however, IF, the trend continued, it could mean that the only android maker with significant profitability could need to look in other directions.

captaincranky captaincranky, TechSpot Addict, said:

I think there's an age old saying about this. It goes like this, "and they cried all the way to the bank"....

"Tears of joy", are a thing of the past. This is the 3rd millennium, and we wallow in, "tears of greed".

umbala said:

Mo' money

mo' problems

lulz

MilwaukeeMike said:

I get it. It's the age old adage, greed begets greed. The investors will never have enough money to make them happy.

It's about expectations. If something is predicted to be A and it turns out to be less than A, then that's 'not meeting expectations' It doesn't matter if A is losing a billion or making a billion.

If something is predicted to be A and it turns out better than everyone is happy. Look at what the stock market does when the unemployment numbers come in at 7.6% instead of 7.7% Stocks go up, everyone praises the 'recovery' and headlines are all positive. Meanwhile everyone forgets that 7.6% is still like double from what it's supposed to be.

it's expectations, not greed. No smart investor has more than just a fraction of their money in one place anyway.

@Archean got it right... How is the S4 supposed to sell well when everyone is using an S3? Same reason the iPhone 5 wasn't popular... no reason to upgrade from a 4S.

cliffordcooley cliffordcooley, TechSpot Paladin, said:

Look at what the stock market does
Now there is a group of leaches, I'd like to pour salt on.

MilwaukeeMike said:

Now there is a group of leaches, I'd like to pour salt on.

If you mean hedge funds I'll agree with you, but general investing in the stock market is part of any smart retirement planning.

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