Is Samsung the new Apple?

Samsung tops Q4 estimates as investors brace for possible third straight miss from Apple

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Samsung Earnings Analysis Q4 2012Image Source: Nan Palmero, Flickr

Samsung (005930) announced earlier this week that it expects to post a record-breaking fourth quarter when it reports its earnings later this month. The consumer electronics giant claimed an unaudited operating profit of about $8.3 billion, topping analysts’ $8 billion estimate by a healthy margin, on revenue totaling $53.6 billion. Samsung said it sold an average of nearly 500 handsets per minute during the holiday quarter, suggesting total shipments well in excess of 60 million units. In other words, it had an Apple-like quarter.

Meanwhile, chatter on the Street suggests an increasing likelihood that Apple (AAPL) will miss analysts’ consensus when it posts results for its holiday quarter on January 23rd. This would be Apple’s third consecutive miss after falling short of Wall Street’s consensus in both the third and fourth fiscal quarters last year, and it would come at a time when Apple shares are still trying to recover after having lost more than 25% of their value in late 2012.

Apple’s performance hardly reflects investors’ soured sentiment, of course, and the company is still expected to post a huge December quarter. In fact, it may very well be the most profitable quarter any technology company has ever posted. Investors still aren’t convinced Apple can maintain its growth over the long haul though, and they’re waiting for Apple’s “next big thing.”

On the other side of the globe, Samsung continues to steamroll over its rivals. The only other Android vendor that has managed to climb into the black in recent history is LG (066570), and it eked a profit of $139 million — including just $19 million from its mobile business — in the third quarter. In the same quarter, Samsung racked up $6 billion in profit while shipping more smartphones than any other company in history.

“Samsung is growing faster than the market,” RBC Capital Markets analyst Mark Sue said in a recent note to investors. “Smartphone penetration is now maturing to a replacement cycle in the developed markets, while growth in emerging markets is expected to be driven by demand for low-end/mid-tier smartphones.”

If recent rumors are accurate, Apple may finally set its sights on emerging markets with a low-end iPhone due out later this year. The company will not have an easy time matching the rock bottom prices hit by various Android handsets and Nokia’s (NOK) pseudo-smartphone Asha line though, so it may have to bank on novelty and hype for the most part as it approaches these untapped markets.

In the meantime, Sue expects Samsung to ship an unprecedented 280 million smartphones in 2013, outgrowing the market and Apple as well.

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