Q4 2013

Apple blamed for Samsung's first profit decline in two years

January 26, 2014: 10:32 AM ET

Slowing Galaxy S4 sales helped push operating profits down 6% year over year.

iPhone sales cut into the Galaxy S4's.

iPhone sales are believed to  have cut into the Galaxy S4's.

FORTUNE -- Samsung had warned investors two weeks ago that there was bad news coming on the smartphone front. But the timing of Friday's quarterly earnings call -- one business day before Apple (AAPL) is scheduled to release its Christmas iPhone sales numbers -- could have been better.

Samsung no longer provides unit sales data, but Daewoo Securities estimates that the world's largest mobile phone manufacturer shipped 9 million Galaxy S4s in Q4, down from 17 million in Q3. Samsung's total mobile phone shipments were 91 million, according to KB Investment, up 4% from 87.3 million the previous quarter.

Apple on Monday is expected to report quarterly sales of 50 million to 60 million high-margin iPhones.

Most of the handsets Samsung shipped, by contrast, were low-end phones fighting price wars with Chinese manufacturers. That, along with the strengthening Korean won (which raised export prices), contributed to Samsung's first quarterly profit decline since September 2011. Operating profits for the December quarter were 8.3 trillion won ($7.8 billion), down 6% year over year.

Analysts reached by Bloomberg attributed the decline, in part, to competition from Apple's new iPhones.

 "A flood of Asian rivals from China and India, such as Lenovo, as well as a product refresh from Apple, are pressuring Samsung," said Strategy Analytics' Neil Mawston. "Samsung's two major challenges for 2014 are to maintain its mobile-phone leadership in China and the U.S., while simultaneously growing its tablet business quickly enough to knock Apple iPad from its perch."

"It's critical that Samsung comes up with new designs in order to protect its market share from Apple in the high-end segment," said Daiwa Securities' Jae H. Lee. "No rapid earnings growth is expected this year as margins at its handset business will remain pressured."

  • The best and worst Apple analysts: Q4 2013 edition

    For the first time since April 2012, the bloggers clobbered the pros.

    FORTUNE -- In the Apple (AAPL) Earnings Smackdowns we've been running every quarter for the past five years, the amateurs who follow the company tend to do better than Wall Street's professionals in quarters where Apple beats expectations.

    And on Monday, with Apple reporting revenues, earnings and unit sales that were all better than the Street's consensus, the indies did it MORE

    - Oct 29, 2013 8:16 AM ET
  • Apple's $37.5 billion quarter: What the analysts are saying - updated

    Despite the report of lower earnings -- the third in a row -- a light at the end of the tunnel.

    FORTUNE -- Once they wrapped their minds around the impact of deferred revenue on next quarter's gross margins, analysts came away from Monday's earnings report feeling mostly positive about Apple's (AAPL) prospects for 2014. A half dozen even raised their price targets.

    Excerpts from the analysts' notes we've seen so far. MORE

    - Oct 29, 2013 7:04 AM ET
  • Live: Apple's Q4 2013 earnings report and conference call

    Apple beat on sales of $37.5 and profits of $7.5 billion; shares dipped briefly after-hours.

    FORTUNE --  Apple (AAPL) beat Wall Street's estimates pretty much across the board -- in sales, profits and units shipped. Earnings were down for the third quarter in a row, but that was as expected.

    Apple closed at $529.88, up $3.92 (0.74%) for the day, but fell sharply in after hours trading. Traders may have been reacting to MORE

    - Oct 28, 2013 4:51 PM ET
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  • All eyes on Apple Inc.

    Wall Street is looking for proof that Apple knows what it's doing.

    FORTUNE --  Analysts are not looking for any big surprises this afternoon when Apple (AAPL) reports its earnings for the last fiscal quarter of 2013.

    Sales are expected to be up slightly from last year and earnings down once again -- the first time in a decade income has fallen three quarters in a row. (See Final estimates for Apple's Q4 2013.)

    Guidance MORE

    - Oct 28, 2013 8:42 AM ET
  • Spreadsheet of the day: Final estimates for Apple's Q4 2013

    The forecasts of 48 Apple analysts -- 27 Wall Street professionals and 21 independents

    FORTUNE - The results of Fortune's quarterly survey of Apple (AAPL) analysts are in, and the results are mixed -- in more ways than one.

    The consensus among the 48 analysts we've heard from -- 27 pros and 21 amateurs --  is that revenues were up (about 3%) in fiscal Q4 and earnings down (about 6%) year over year.

    The spread between MORE

    - Oct 27, 2013 6:00 AM ET
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