Samsung Highlights Strong Galaxy Note 4 Sales, But Mobile Profits Down 64 Percent
Samsung may have been disappointed that it wasn't able to sell as many Galaxy S5 devices as initially thought, but it's Galaxy Note 4 phablet picked up the slack, helping the company's IT & Mobile Communications unit see a boost in earnings. The South Korean electronics company also credited its more efficient management of marketing expenditures for its recovery in earnings.
Overall, Samsung's total revenue for its fiscal fourth quarter ended December 31, 2014, was 52.73 trillion won ($48.6 billion), resulting in an operating profit of 5.29 trillion won ($4.87 billion). Not too shabby, though what's worrisome for Samsung and its investors is that as good as these numbers appear, they're down from last year -- compared to a year ago, Samsung's operating profit and revenue are down 36 percent and 11 percent, respectively.
Equally disturbing is that its mobile division is down 64 percent year-over-year, and that's with solid sales of the Galaxy Note 4. This left Samsung leaning on its other operations to pick up the slack, such as its Device Solutions (DS) division, which saw an increase in revenue due to solid demand for memory products and an increase in 20nm mobile application processor supply.
It's tough to know what the future holds for Samsung's mobile division. The company recently put into motion a major restructuring effort that saw the dismissal of three high-level executives, and part of the plan going forward is to streamline its mobile phone business by reducing the number of handsets it offers. Time will tell if that strategy pays off.
Another thing to keep an eye on is display sales. Samsung is confident that its 4K Ultra HD and curved panel TVs will see expanded sales in 2015.
Overall, Samsung's total revenue for its fiscal fourth quarter ended December 31, 2014, was 52.73 trillion won ($48.6 billion), resulting in an operating profit of 5.29 trillion won ($4.87 billion). Not too shabby, though what's worrisome for Samsung and its investors is that as good as these numbers appear, they're down from last year -- compared to a year ago, Samsung's operating profit and revenue are down 36 percent and 11 percent, respectively.
Equally disturbing is that its mobile division is down 64 percent year-over-year, and that's with solid sales of the Galaxy Note 4. This left Samsung leaning on its other operations to pick up the slack, such as its Device Solutions (DS) division, which saw an increase in revenue due to solid demand for memory products and an increase in 20nm mobile application processor supply.
It's tough to know what the future holds for Samsung's mobile division. The company recently put into motion a major restructuring effort that saw the dismissal of three high-level executives, and part of the plan going forward is to streamline its mobile phone business by reducing the number of handsets it offers. Time will tell if that strategy pays off.
Another thing to keep an eye on is display sales. Samsung is confident that its 4K Ultra HD and curved panel TVs will see expanded sales in 2015.
