Samsung's Profit and Revenues Nose-Dive While Stock Rises

[dgstorm]

Even though Samsung's recent quarterly numbers were abysmal, their stock actually soared by 4.5%. That is only because the estimates were worse than the final results. Still, looking at these results you know that Samsung executives must be sweating bullets right now. The company's profits for Q3 tanked by 60% on the year down to $3.9 billion, and its revenue back-pedaled 20% to $44.6 billion. Ouch! If that's better than what analysts' estimated, then the outlook must have been very grim.

The main reason that Sammy has been so hammered the past few quarters is two-fold. One, Apple has stepped up their game and has been rapidly stealing marketshare back from Samsung, especially with the new iPhone 6 and iPhone 6 Plus. This is putting extra pressure on Samsung at the high-end. The second factor bashing away at Samsung comes from the low-end market. Chinese manufacturers like Xiaomi, Huawei and others have been trouncing Samsung in the cheap phone arena where Sammy previously thrived.

It seems like a "perfect storm" of anti-Samsung tactical competition is weakening their position across the globe. Their are some analysts out there suggesting that Samsung is facing a "nightmare scenario." They are even comparing Samsung's precipitous drop to that of HTC or Nokia, both previous examples of former tech titans who were once the king of the hill, but are now struggling to survive (or got gobbled up in the case of Nokia). While it is highly unlikely that Samsung will ever fall as far as both of those companies did, it is likely the free-fall will not let up anytime soon.

Source: Samsung & BGR

 

[Heero121]

Maybe i just really hate the whole stock market being a corrupt system where the top execs always come out more wealthy, making the top 1% even more wealthy, and making the middle class believe they too can earn a profit, when the big picture of gains is purely for the upper echelon of wealth holders.....anywho before i go off on a rant, It is upsetting to see that a company who is still making 3.9 billion dollar profit (IN A QUARTER), is still talked as taking a loss in business talk shows. A profit is a profit, which means away from all other expenses aside, it is a surplus. 3.9 billion dollar surplus in one quarter isnt bad, and I wish wall st boys/girls would stop making it sound like they are taking a beating when the vast majority of population is in the deep red. I dont even know where im going with this anymore. *pauses for dramatic effect* (╯°□°）╯︵ ┻━┻. good day.

 

[dgstorm]

Your point is valid, but ultimately, the fact that their profits had such a dramatic shift downward is what is very trouble-some. With the thin margins in electronics today, it isn't too far down before Samsung is in the same boat as HTC was for a few years in which they took losses instead of profits.

 

[cr6]

Both good points, however I don't see Samsung ever dropping to HTC levels, it simply won't happen. At least not to the extent we witnessed with HTC.
Anything is possible I guess...

S5 tap'n

 

[Ollie]

I don't see the iPhone 6 being an issue either. All of the pressure is from the bottom. The bottom not necessarily being super low end spec'd phones, but also similarly spec'd phones with much cheaper price tags.

I'm just not seeing an influx of Android users migrating to Apple. The only difference that I can rationalize the i6 making is the amount of iFans switching to Android becoming less.