But don't worry, the company still made $7.73 billion in profit in three months
Samsung has just posted its Q4 2013 earnings, and while the numbers are still large in every category there were some troubling decreases in revenues and profit in most sectors. In a quarter usually dominating the rest of the year because of holiday sales, Samsung's profits rose just 0.3 percent, with operating profit dipping 18 percent. Here are highlights:
- Total revenues of $55.13 billion, up 0.3 percent quarter-over-quarter
- Operating profit of $7.73 billion, down 18 percent q-o-q
- Mobile revenues of $31.52 billion, down 9 percent q-o-q
- Mobile operating profit of $5.09 billion, down 18 percent q-o-q
The only segments of Samsung's business that didn't drop in the quarter were Consumer Electronics (TVs and appliances) and Semiconductors (processors, RAM, etc.), although those two segments combined are only about two-thirds the size of the Mobile Communications business.
So what happened in mobile? Samsung says that demand increased for both smartphones and tablets in the quarter — as you would expect — but that earnings were down in the segment due to high expenses. Big spending in marketing and one-time expenses cut into the traditionally large profits for the holiday quarter. Shipments of smartphones were also down just slightly due to inventory adjustments. Samsung calls out the Galaxy Tab 3 and Note 10.1 (2014) as driving tablet sales, with North America and Europe receiving most of the shipments.
As for the 2014 outlook, Samsung says it expects price and product competition to increase through the year as more people switch from featurephones to smartphones around the world. The combat the pressure, the company plans to diversify its mid- and high-end products to "address customer needs," as well as push various new tablets through both developed and emerging markets.