Record profits for Samsung, yet analysts are still unhappy

Record profits for Samsung, yet analysts are still unhappyIt ain't easy being Samsung. We're talking the company that makes one out of two smartphones sold in Europe's main markets, the company that's totally dominating the Android ecosystem, and the company that's just announced record quarterly profits of $8.33bn (£5.4bn).

So what's the problem? Just this – those record quarterly profits fell short of what analysts were expecting, and so the talk today is all about slowdowns and disappointment.

Samsung's full quarterly results for April-June will only be announced on July 26, but the estimated bottom line announced this week gives a fairly strong indication that cash is not something that's running low in the Korean firm's proverbial back pocket.

It's a fairly serious bump on the $6.4bn raked in from January to March, probably in large part due to a certain smartphone called the Galaxy S4. More impressively, it's firmly up on the $5.86bn recorded in Q2 last year.

That's a considerable chunk of change, yet take a sample of some of the analyst comment today and you'd be forgiven for thinking Samsung had just announced it had been forced to sell off some of its office furniture just to pay the rent.

You see, analysts on average had been expecting something in the region of $8.9bn in profits, and the difference is clearly big enough to have soured their mood quite considerably.

“Is Samsung's smartphone story now over?” asks one investor (before answering “not quite”), while another talks about “big uncertainty about how Samsung will respond to the low-end market”.

Another talks about how it's a worry that 70% of Samsung's total profits comes from its mobile business, though we'd humbly suggest that given global trends in the consumer electronics biz that's probably where 70% of all profits are coming from right now.

Forget the smartphone story being over, it's simply that Samsung's growth, like all growth, cannot last forever. Just like we've seen with Apple, slowdown is unavoidable simply because the rate of advance has been so rapid in the first place.

In the end, it brings two old sayings to mind: the first is what goes up must come down. The second, and probably the real moral of this story, is there's no pleasing some people.

Via Reuters

Add a comment
 1 comment

JanSt / MOD  Jul. 5, 2013 at 12:00

sounds fruitily familiar....


You don't need an account to comment. Just enter your email address. We'll keep it private.