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back to article Samsung: Ta-da! We made $7.8bn. What do you mean you expected another BILLION?

Samsung Electronics has missed analysts' estimates of its operating profit for the fourth quarter of last year, after a one-off special bonus for employees and slowing demand for high-end smartphones. The company said that its guidance ahead of the full results on January 24 put operating profit at 8.3 trillion won ($7.8bn, £4. …

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Pirate

Wall Street's tealeaf readers' pronouncements fail to happen

Samsung's shares punished as a result.

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Re: Wall Street's tealeaf readers' pronouncements fail to happen

To be fair Samsung's profits being down year on year (not just on the previous quarter, which is pretty meaningless) wasn't a good result. That's what hit their shares.

Market analysts look at the market, trading conditions etc, and try to estimate the performance of a company. Until they release results you don't know if the company has under performed, over performed or matched expectations, but the market trades as if the consensus was correct. After results the share price adjusts to match actual numbers (plus how the market feels the company will perform in the future, so good results can still result in the price falling), so even if there were no analysts out there the price would have fallen on these results.

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Anonymous Coward

Re: Wall Street's tealeaf readers' pronouncements fail to happen

Given the world economies are recovering and HTC is struggling.

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Re: Wall Street's tealeaf readers' pronouncements fail to happen

And there is everything that is wrong with the world economy. Burning fast, burning hard and burning out.

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Re: Wall Street's tealeaf readers' pronouncements fail to happen

Until they release results you don't know if the company has under performed, over performed or matched expectations, but the market trades as if the consensus was correct.

Rational market theory has been disproven, discuss…

All of the estimates are from people who have interest in the result.

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Stop

Re: Wall Street's tealeaf readers' pronouncements fail to happen

@The Big Yin - And communism worked out so well as an alternative didn't it. Welcome to the capitalist world.

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Re: Wall Street's tealeaf readers' pronouncements fail to happen

Straw man, I never mentioned communism.

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Analyst another word for 'professional guesser'? Wonder why they were wrong? :/

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Joke

How dare

they spend the companies profits on special bonuses for the workers... that money belong to us shareholders and the managers who take all the risks.

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Re: How dare

Yes, no wonder the share price dipped. Next thing you know workers will demand salaries and watnot. We certainly can't have that.

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Anonymous Coward

Saturated the market. Once everyone has a dull plastic toyphone then they'll start to differentiate themselves by buying something else.

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Anonymous Coward

"Saturated the market. Once everyone has a dull plastic toyphone then they'll start to differentiate themselves by buying something else."

Unlike certain other companies, Samsung make many, many diverse products, not just plastic phones.

c.f. http://thediplomat.com/2013/12/samsung-heavy-industries-floats-the-worlds-largest-ship/

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I will never grasp modern day economics - a company manages to make a profit, stopping to give some money away to the very people that worked for the success, and it's shares go down. WTF is the logic in that?

How can not meeting a target be a loss if you have made a profit? You can't loose what you never had ;)

And why is it that this twisted theory based on unrealistic assumptions, misinterpreted statistics and random guesses does not apply to me?

I estimated I'd make a million this past year, I haven't - as such, I'd like to register a loss of 950k, coupled with costs way over the remaining 50k that I made, I really shouldn't be paying any taxes, should I now?

Ridiculous and sad state of humanity.

Crisis after crisis, people struggling everywhere, and we continue to refuse to base our economy on actual numbers not continuous speculations.

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Stop

Wrong way of thinking about it

If your bank estimated you'd make 1 million and you came home with only 50K then of course they are going to reduce your credit limit. It's all to do with what they think you can pay back in the future.

Shares fall because the market thinks profits are falling and returns in the future will be lower. It doesn't matter if your results were spectacular or tiny (I'm thinking of Amazon here), if the market thinks you will make big profits in the future then your stock price goes up, and if the market isn't confident in your future then they go down.

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Peak Samsung

Come on Reg that's got to be a meme in the making

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Boffin

$7.8bn

$7.8 BEEELION, surely.

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Byz

The problem they've got...

is that they were trying to make the brand appear more exclusive on the high end phones.

However as they run Android it makes it hard to distinguish high end from low end, if Samsung could get some traction on their own OS then it might be a possibility. Also as their strategy for handsets is to make just about every conceivable combination they end up with the same issue that Apple had in the mid 1990's (you can't give a good reason why one model is better than another) this means that profits per model become lower due to the economy of scale.

As Android is available to all handset makers if someone brings out a much better android phone then it become hard to counteract the threat (given that there is an annual cycle of new models), Nokia ended up in this situation.

Lastly as a developer with android you have to make a choice as to which handset format you will develop for (as there are so many formats) thus it is hard to get the same apps for all handsets. You can see this problem with the Galaxy gear watch as it will only work with a very small selection of Samsung phones.

And as for different being able to run the latest version of Android on your phone/device don't even go there..

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Re: The problem they've got...

Lastly as a developer with android you have to make a choice as to which handset format you will develop for…

You clearly haven't done any kind of development. Android has the most effective way of targeting multiple form factors.

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Byz

Re: The problem they've got...

"You clearly haven't done any kind of development."

UI and UX design are not just about using tools, it's about trying things out with testing apps for different people and not thinking of things from a developers perspective.

Also I have done loads of development and overhauled apps for companies as the original developer had made a real pigs ear of the UI and UX.

I will often build an app and then road test it with friends and family on different formats for a few months, it is amazing how many points come out and sometimes you have to go back to the drawing board (literally). What works great on a phone can look bare and empty on a tablet (or slightly larger phone), whereas when you scale down apps you often need to remove or rethink how to present it in a smaller format.

If however you just bang out apps you don't think about these things, the difference between an ok app and a great app is that developer/designer have thought about the form factor first.

So you can carry on believing I haven't done any development, however maybe you should consider that some developers take pride in what they develop and like others to enjoy the UX :)

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Stop

Re: The problem they've got...

"I have done loads of development and overhauled apps"

"I will often build an app and then road test it with friends and family"

Wooo wooo wooo buckaroo. Let's back up.

"I have done loads of development and overhauled apps"

No, you haven't.

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TI calculators

Before LCD came out they were those burning glowing wire types and our family had one and it would auto add for you and I swear it was more fun to play with than most toys.

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Anonymous Coward

Where are all the PEAK SAMSUNG headlines?

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Anonymous Coward

Alternate titles:

Samsung investors have bitter tablet to swallow.

Not very Phab(let) results worry investors.

Peak Samsung: But we sold more fridges this quarter say Samsung!

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The Galaxy S2 was a great phone and is still available and is still good enough for the majority of users. The Galaxy S3 is likewise still a great phone and easily good enough for the majority of users. The Galaxy S4 is also a great phone, but not especially different to the Galaxy S3 for the majority of users.

In the developed markets, we've largely hit smart-phone saturation and the smart phone manufacturers should now be subtly changing tactics so rather than producing newer, bigger phones with more pointless features they should be arranging other streams of income and refining their devices to give better value. This isn't affecting just Samsung, the same is true for Apple. And to aptly demonstrate the problem affecting the flagship phones, Motorola (Google), produced the Moto G which is almost as good as the top of range devices of last year but at a bargain price.

Nothing to stop them coming up with some "entirely new", but smart-phones as they are have hit a plateau. Although I'd prefer the next gen of battery technology to come sooner rather than later...

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so...how's that market share approach to profitability working out for ya?

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Looks like it's working out pretty well, they made $7.8 billion after giving away hundreds of millions to the people who made them all that money.

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in other news...

Apple to announce record profits and sales in the last quarter

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Re: in other news...

I can't say anything about next quarter, but apple's profits dropped between Q4 2012 and Q4 2013.

Also, their profit is inline with samsung's but not as diversified (Sammy sells, TVs, SSDs, Fridges... too much to count, plus the components used to make many of these (NAND Flash, LCD elements, OLED elements), many of which Apple buys). Samsung contenues to diversify their product line too.

I'll leave figuring which is the higher risk as an exercise to the reader.

(buying Sammy stock is an interesting matter though)

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Trying to figure out how anyone on wall street is doing anything with samsung

Samsung isn't traded on any US markets.

The last transaction of Sammy stock my broker knows about was four days ago. Being profitable but taking a stock-price hit, I was interested in maybe picking some up.

Not as easy a task as I'd thought it would be.

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