Samsung's Q1 2015 Net Profit Down 39 Percent From Year Ago

 
 
By Todd R. Weiss  |  Posted 2015-04-29 Print this article Print
 
 
 
 
 
 
 
Samsung, Apple, Galaxy S6, iPhone 6, revenue, earnings, Q1 earnings

Much is riding on Samsung's recently launched Galaxy S6 and S6 Edge smartphones, which went on sale in April and are seen by the company as magnets for increased smartphone sales.

Samsung has reported a $4.63 billion net profit for the first quarter of 2015, which is down 39 percent from the same quarter one year ago when the company had a $7.04 billion net profit. For the South Korean smartphone and electronics maker, it's been a disappointing trend downward that's been repeated often over the last several years.

Revenue was also down for Samsung in Q1 at $43.8 billion, compared with $49.9 billion for the same quarter one year ago, according to figures announced on April 29 in a statement. Samsung has been continuing in the last year to battle its way back from several tough financial quarters caused largely by cheaper phones from global competitors and shrinking sales as consumers waited to buy Apple's latest iPhone 6 models when they went on sale last September.

Mobile phone sales fell in Q1 to $23.2 billion, down from $29.1 billion for the same period one year prior, while semiconductor sales rose to $9.5 billion, up from $8.7 billion one year ago.

Operating profit for the quarter was down about 30 percent to $5.64 billion from $7.8 billion in the same quarter one year prior.

In a statement released with its earnings report, the company said it expects Q2 sales to rebound and earnings to improve led by increased sales of its flagship Galaxy S6 and S6 Edge smartphones, which went on sale earlier in April around the world. The Galaxy S6 phones are aimed directly at Apple's iPhone 6 and iPhone 6 Plus models, which have been helping Apple to hit all-time sales and revenue records since their appearance in the market.

Samsung's Q1 figures do not yet include sales of the new Galaxy S6 phones, which will be reflected in the second-quarter earnings report.

Company officials apparently remain bullish that earnings improvements will be coming as the year progresses. "Galaxy S6 sales have been going as well as expected, while demand for the Galaxy S6 Edge have been better than anticipated," Park Jin-young, a Samsung vice president, said during the conference call, according to a report by Reuters.

The company is hoping for a big financial turnaround in the near future since its all-new, redesigned and flashier Galaxy S6 and Galaxy S6 Edge phones have arrived.

The new Galaxy S6 and Galaxy S6 Edge smartphones attracted so much initial consumer interest that Samsung quickly boosted its production targets for the new devices. Instead of producing 7 million Galaxy S6 and S6 Edge devices in April, Samsung placed orders for an extra 1 million units, boosting its order to 8 million smartphones for the month, according to earlier reports. Samsung had previously said it had ordered 5 million of the smartphones for March, bringing the total production for the two months to 13 million phones.

The new Galaxy S6 smartphones are quite impressive, giving some credence to Samsung's hopes that they will hit the mark when it comes to taking on the iPhone 6 and the iPhone 6 Plus around the world.

The improvements in the new S6 smartphones over the previous Galaxy S5 model are many and range from a chassis made of aircraft-grade aluminum to a higher-resolution 5.1-inch, quad HD Super AMOLED (Super active-matrix organic LED) display, Samsung's latest eight-core 64-bit Exynos 7 processors, and new LPDDR4 flash RAM and non-expandable UFS 2.0 flash storage that will be available in three capacities—32GB, 64GB and 128GB.

Samsung continues to be in the midst of plans to pare back its model line and cut production costs to better compete, according to earlier eWEEK reports.

For the fourth quarter of 2014 ended Dec. 31, Samsung posted revenue of $48 billion, which was an increase of 11 percent from Q3, when the company posted $43.2 billion in sales, according to an earlier eWEEK report. Net profit for Q4 was $4.8 billion, up 26.3 percent from the $3.8 billion that was posted in Q3. That $48 billion in Q4 revenue, however, was down 12 percent from the $54 billion the company posted in the same quarter one year prior. Full-year 2014 revenue was also down, to $188 billion, a 10.6 percent drop from the $208 billion posted one year prior.

The company posted a net profit of $4.8 billion for Q4, which was down 37.5 percent from the $6.6 billion in net profit posted in the same quarter one year prior. Full-year 2014 net profit was $21.28 billion, down 30 percent from the $27.7 billion posted for the full year of 2013, according to the company's figures.

Samsung's main rival, Apple, has had soaring sales since its release of the iPhone 6 models. In its fiscal Q2 earnings report earlier this week, Apple reported global revenue of $58 billion, which was a 27 percent jump from $45.6 billion in the same period last year, while net profit in this interval rose 33 percent to $13.6 billion from $10.2 billion. Contributing to that success were the sales of 61.2 million iPhones globally. The latest Apple quarterly results came three months after Apple's best-ever quarter, when the company posted a record $74.6 billion in revenue in the first quarter of fiscal 2015. Apple also posted a record $18 billion in profits in the first quarter.

 

 
 
 
 
 
 
 
 
 
 
 
 
 

Submit a Comment

Loading Comments...
 
Manage your Newsletters: Login   Register My Newsletters























 
 
 
 
 
 
 
 
 
 
 
Rocket Fuel