Samsung Holiday Quarter Profits fall to $5.1B – Warns of Continued Weakness in the Economy

Posted by at 8:47 am on January 28, 2016

Samsung LogoSamsung Electronics announced financial results for the fourth quarter that ended December 31, 2015. Samsung posted 53.32 trillion won ($44.4 billion) in consolidated revenue, seeing profits from the quarter fall to 6.14 trillion won ($5.1 billion) from the previous quarter’s 7.39 trillion won ($6.2 billion). The company pins global economic headwinds, a sharp fall in oil prices, and “softer demand” for PCs for the fourth quarter’s lowered earnings from the previous quarter.

The company’s Semiconductor business registered 2.80 trillion won ($2.33 billion) in operating profits on consolidated revenue of 13.21 trillion won ($11 billion) for the quarter. The company noted that in the quarter, weak demand across several markets, impacted the Memory business overall revenue, but sales of mobile and server DRAM were solid.

The Display Panel segment posted 6.53 trillion won ($5.43 billion) in consolidated revenue and 300 billion won ($250 million) in operating profit for the quarter. The LCD panel division saw a earnings decline from the last quarter due to a decrease in shipments of large-size panels and continued decline average selling price.

Samsung’s Mobile division posted 25.00 trillion won ($20.8 billion) in consolidated revenue and 2.23 trillion won ($1.85 billion) in operating profit for the quarter. A slight quarter-over-quarter decrease in smartphone shipments was noted due to a year-end inventory adjustment. A sales decline in the the mid- to low-end products was declared as the cause for the decline in sales, with a seasonal increase in marketing expenses slightly impacting profit.

As for the contribution of tablets to the bottom line, quarterly shipments and sales increased due to seasonal demand and steady sales of the Galaxy Tab A and Tab S2. Samsung expects single-digit percentage growth in both the smartphone and tablet categories amid softening demand and intensifying competition.

The Consumer Electronics Division, encompassing the Visual Display, Digital Appliances (Internet of Things), Printing Solutions and Health & Medical Equipment businesses, posted 13.85 trillion won ($11.6 billion) in consolidated revenue and 0.82 trillion won ($680 million) in operating profit for the fourth quarter.

Overall, the company reported full-year 2015 revenue of 200.65 trillion won ($166.9 billion) and a full-year 2015 operating profit of 26.41 trillion won ($21.97 billion), eking out a small gain year-over-year. In fiscal year 2014, the company delivered revenue of 206.21 trillion won ($171.5 billion), with a 25.03 trillion won ($20.82 billion) operating profit.

 

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