Samsung profits slide 26% amid poor display sales

By on Jul 7, 2011 at 10:01 PM
Business July 7, 2011

Samsung’s profits fell 26% during the second quarter due to poor sales in its LCD display division, according to a report the company released today. The firm’s operating profits were $3.5 billion for the quarter, down from $4.7 billion from the same period last year. According to a survey from Bloomberg that included six analysts, the Korean company’s display arm is expected to post an operating loss of 3.5 billion won ($69 million), down from an 880 billion won ($827.2 million) profit during the second quarter of 2010. Earlier this week, the head of Samsung’s combined LCD and semiconductor business, Kwon Oh-hyun, confirmed that Samsung’s component sales would suffer during the second quarter. That business could suffer more as Samsung continues to fight multiple lawsuits with its largest LCD buyer, Apple, and rumors have suggested the iPhone builder could drop Samsung as a supplier. “Only the phone business is holding up,” Kim Sung In, an analyst with Kiwoom Securities Co. told Bloomberg. “Everything else is looking bad. There’s no bright picture for the company looking ahead.”

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  • sirpaul

    Damn, they made only 3B in the last quarter? Kim is absolutely right, there is no hope for this company.

    And did anybody else notice the unintended pun?

     ”…no bright picture…” (amid poor display sales).

    • Drew

      Do you even read?  3B means a lot less when it’s a declining figure.  And when you see the profits decline and you are in a legal battle with the company that purchases the most amount of the hardware you make the most money, that’s not a positive outlook at all.  Think about what their profits will be if Apple dropped them.  They will have to hope other companies can pick up the slack.  Android devices aren’t going to keep them in business because it’s too much competition. 

      • sirpaul

        It’s still a helluva lot of profit – they aren’t going anywhere. It’s not like they were in ruins before Apple started purchasing displays from them. Profit can’t go up forever. Sure it’s a big hit, but it’s a big hit out of an already very large paycheque.

      • Anonymous

        LOL you actually think their ability to create the best televisions and arguably the best android phones isn’t enough to keep them in business? Wow… “what did they do before Apple!” because obviously Samsung makes no other products and was borne out of apple’s need for hi res screens?

        I swear, an overwhelming majority of people who litter these forums with their filth must have no idea about the “real” world and running a business…. either that or you have been praying to Steve Jobs for far too long.  Apple has ANTI-Competition practices — they are a great business, but they are not in it for consumers, they are in it for the money plain and simple and they are out to crush any competitors by any means necessary….  

        The fact that their marketing heavy business model is extremely successful is great, but if they actually succeed in taking over a majority of the market and also use their weight to bully other competing companies that also suppy their parts…. we the consumers will be missing out on some really good things that high competition brings into the market, namely diverse product and rapid innovation.

        Aside from that, Samsung isn’t going anywhere, they will continue to turn a profit, even if they have to get more efficient (lay people off) and innovate.

      • Mac

        Why don’t you head on down to your favorite gay bar and find someone to ream your ass? You sound a little constipated.

      • sirpaul

        You are perfectly right, and exactly my point. There are a lot of retarded analysts out there that just want their ‘findings’ published.

        “Everything else is looking bad. There’s no bright picture for the company looking ahead.”

        HA! Right.

      • Anonymous

        If they intend living off televisions and android alone, they’ll need to shed a significant amount of assets to streamline their business.  That would cause significant charges against their balance sheet.  Yes, its possible to be a profitable company off those two product lines, but it’ll be a company that was a shadow of its former self.  You shouldn’t be so smug of others.

        I don’t think any of this is going to happen anytime soon.  But, the assets and fixed costs associated with $3-4B a year is significant and if they can’t pick up new customers, they’ve got some hefty charges they’ll have to make in outlining years.

    • jb1000

      from $4.7 to $3.5 billion is a decrease of 26%. That’s a significant reduction.

      • Sung

        It depends. Was the $B4.7 normal, or was is it an outlier itself? it might be that this is a more normal quarter compared against an unusually large one. I own more Samsung products than Apple products, and I have a *lot* of Apple products.

        However, if Samsung were smart they’d quit making blatant copies and get friendlier with their best customer. But they won’t. Samsung is the most arrogant on the planet.

  • Anonymous

    Apple is about to drop them like a mediocre habit.  $1.5 billion of revenue per quarter down the drain.  WTG Samsung!

    • http://twitter.com/jackrazzlin Jack Azlin

      You’re saying that like it’s something to be proud of.

      Samsung didn’t do anything wrong, Apple didn’t invent square icons and rectangle phones. It’s nothing but greed for the sake of greed.

      • http://pulse.yahoo.com/_JNKVTT7PJMXPYP2GVCIERBQQCU Andrew

        Don’t you understand that’s every tech firm in the world?  If Apple feels like Samsung is passing off their products as iOS-like devices, they have the right to do so.  Doesn’t mean they are right but they certainly are at liberty to do so.  And if they want to pick another LCD manufacturer they can do so as well.  Samsung would hurt a lot more than Apple since Apple is their largest purchaser.  The rest of those companies don’t have the cash to spend like Apple for their devices.  Samsung better hope Google gets into the hardware business so they can become a purchaser.  Otherwise we will see their profits keep declining.

      • Anonymous

        Then why is it out of all smartphones, only Samsung’s TouchWiz and certain phone hardware look almost exactly like a 3GS?

      • http://twitter.com/jackrazzlin Jack Azlin

        You’re saying that iOS is original?

        Grey bar along the bottom of the screen with your most used apps. Sounds like Windows 98 to me.

  • Manit Suri

    The displays they sell that go on TV, they need to lower the price on some of those.  Samsung makes really good HDTV’s but are way couple hundred dollars more expensive then say Sony, LG, Sharp.  They can also star by giving other companies SAMOLED displays unless that would have a negative effect on Samsung mobile sales, as their SAMOLED screens were one of the strongest stand out features.  They should sell HTC some displays, as the S II is rated the best Android smartphone to date, no need to worry. Bring that phone to America!

    • http://pulse.yahoo.com/_JNKVTT7PJMXPYP2GVCIERBQQCU Andrew

      Not sure how good of a business decision it would be to provide the stand out hardware feature on your devices to a competitor.  Give HTC that super amoled screen and already with Sense UI, that will certainly hurt samsung.

    • Anonymous

      I’ve always found Samsung HDTVs affordable… have they gone up recently? Sony seems overpriced.

  • Anonymous

    Samsung is done. That’s what u get for hitching ur wagon to a shitty horse(android). Both samsung and android will be gone in 2-3 years.  true story™©®

    • Darius

      I don’t think you read the article.  They said their phone business is doing good.  Also, I doubt Android is going anywhere.  There are still millions of people out there in the world who can’t afford an iPhone.  Android will most likely be filling Nokia’s gap.

      • Anonymous

        I see you are at step 1. Denial usually lasts a while. When u finally get to
        the last step acceptance u will Feel as if a weight has been lifted off your
        shoulders. Unfortunately u will also feel as if google and your android
        phone manufacturer has lifted a ton of your cash.  true story™©®

      • cokobo

         Maybe it is you who is in the denial step… knowing how Android is winning the phones battle…

        I don’t really know what is going to happen, and I like Apple products, as they are good doing what they do. But the way Apple “forces” you to go their way… I just prefer not to buy their products if there is something as good out there. And right now Android fits perfectly my needs and is, in my opinion, getting the advantage in innovation. That makes it a serious rival to iPhone, it does not have to fight only in a cheap segment… I repeat, I don’t know what would happen in the future. But numbers are good for Android by now, and they offer the user a more “open” way to do things, which I think will be something people will ask for more and more in the future. 

      • Anonymous

        I believe so too as well. The market share Android is gaining is at the expense of Nokia, MS, and RIM.

    • http://twitter.com/jackrazzlin Jack Azlin

      Can someone ban this stupid cunt? Please.

  • alex sunarto

    the market might could be taken by others competitor, should create new innovation to attract their customer

  • http://twitter.com/Juanky1503 Juan C. Fernandez

    ouch, i guess thats what happens when you start copying your major buyer

    • http://identi.ca/LauRoman Laurențiu Roman

      Except the fact that Apple uses mainly LG displays (at least that was the general consenus). What the hell is it then? Where does Apple buy their screens from? Samsung did (and for the moment still does) manufacture their processors and i guess memory. I always thought that Samsung had higher prices then LG but lower then Sony compaire qualitatevly.

      • http://pulse.yahoo.com/_JNKVTT7PJMXPYP2GVCIERBQQCU Andrew

        Even though Apple does use majority LG displays they are still Samsung’s largest purchaser.  That’s a large chunk of revenue that could possibly go away.  Apple also uses Samsung hardware in their computers too.  If they just stop buying everything altogether from Samsung it will hurt. May not kill the company but it will hurt.  You know how many manufacturers want to be Apple’s suppliers?  Enough for Samsung to be worried.

  • Alexander530

    Samsung should swallow their pride and make ammends with Apple. Apple is not only their largest customer on both the iphone and ipad displays, but on SoC chips as well. You don’t rip off your biggest client.

  • Anonymous

    I think the lesson here is “Don’t f**k with Steve Jobs.”  He’ll put you under his heel, twist down hard, and walk away, leaving nothing of you but a stain on the floor.

  • Anonymous

    It might make more sense for Samsung to spin off it’s less profitable divisions and focus on where it’s making money.

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