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Samsung's cash pile triples in one year, now worth $28.5B after debt

post #1 of 36
Thread Starter 
Samsung's profitable smartphone business has caused the South Korean company's cash to swell to nearly $40 billion, with a net cash position of $28.5 billion when debt is factored in.

Galaxy S4
Samsung's new flagship smartphone, the Galaxy S4.


While the sum is still well behind the $145 billion debt-free cash pile Apple had as of the end of the March quarter, it's still an impressive haul that's among the largest in Asia. In fact, Samsung's net cash has nearly tripled over the last year, according to The Wall Street Journal.

Samsung saw its net profit increase by 42 percent in the March quarter. The company, which makes the popular Galaxy-branded handsets, is Apple's chief rival in the smartphone space.

As Samsung's cash has grown, so too has interest in how the company plans to use the money. Market watchers expect Samsung to make acquisitions, while some shareholders hope the company will boost its dividend.

For years Apple found itself under pressure to formulate a plan for its growing cash pile. With interest and speculation at a fever pitch, the company announced a $100 billion capital reinvestment program during its quarterly earnings conference call last month.

The bulk of that $100 billion will go toward a share buyback program, while the remaining money will cover a 15 percent increase in Apple's quarterly dividend. Because about $100 billion of Apple's $145 billion is held overseas, Apple took on debt in the form of bonds to fund the program ? a move that will allow the company to avoid $9.2 billion in taxes that it would pay to repatriate the rest of its cash.

Investors have reacted positively to Apple's cash plans. This week, outspoken critic David Einhorn, chairman of Greenlight Capital, announced he had increased his stake in Apple following the announcement of its capital reinvestment plans.

Apple's cash and cash equivalents are still more than five times greater than Samsung's $28.5 billion after debt, so investors are not yet clamoring for the South Korean electronics maker to devise a plan as loudly as the criticism of Apple eventually became.

For its part, Samsung told the Journal that the company's cash will be used to prioritize "investments sustainable for areas like facilities, R&D, and marketing that will help the company solidify or boost competitiveness."
post #2 of 36
Dirty money.
post #3 of 36
R&D? Samsung's entire R&D involves stealing 100% of the REAL R&D that Apple does every year, then hoping to win the subsequent lawsuits that come about from it.
post #4 of 36
I wonder what fraction of Samsung's $29B is trapped in the USA, lest they have to pay taxes to repatriate the money to Korea? Or doesn't Korea tax money in that way? Does Samsung face tax consequences similar to Apple's?
post #5 of 36

Is this Samsung or Samsung Electronics?  

post #6 of 36
"Samsung's entire R&D involves stealing 100% of the REAL R&D that Apple does every year" one of the dumbest crap I've heard in months.
post #7 of 36

Gotta be Samsung Electronics. I mean Samsung Group is beyond the scale of Apple.

post #8 of 36

They are even copying Apple's cash-hoarding now ¡

post #9 of 36
Quote:
Originally Posted by wjdzm View Post

Gotta be Samsung Electronics. I mean Samsung Group is beyond the scale of Apple.

Oh yes. Samsung is conglomerate. It is.

In that way only I mentioned 

 

 

Quote:
Is this Samsung or Samsung Electronics?  
post #10 of 36
Quote:
Originally Posted by TeaEarleGreyHot View Post

I wonder what fraction of Samsung's $29B is trapped in the USA, lest they have to pay taxes to repatriate the money to Korea? Or doesn't Korea tax money in that way? Does Samsung face tax consequences similar to Apple's?

Here is a bit of Samsung's iffy history with Korea's tax agency.
http://www.nytimes.com/2009/12/30/business/global/30samsung.html?_r=0
post #11 of 36

I guess there is money to be made in only shipping phones and never selling them.

post #12 of 36

Let's put this in context people. $28B is about what Apple makes in 9 months, in cash. Apple's cash grows by $40B in 2012. That's 40% from an already huge pile. And it's not a single year--it has been going on since 2001. In fact, Apple said it had $4.3B in cash in 2001, by end of last quarter, it had $145B. That's an average growth rate of 37% for the past 11 years. Amazing indeed.

post #13 of 36
I fully expect AppleInsider to keep us updated on the cash pile race because it is so important to present everything into as a competition. /s

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post #14 of 36
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Originally Posted by zoffdino View Post

Let's put this in context people. $28B is about what Apple makes in 9 months, in cash. Apple's cash grows by $40B in 2012. That's 40% from an already huge pile. And it's not a single year--it has been going on since 2001. In fact, Apple said it had $4.3B in cash in 2001, by end of last quarter, it had $145B. That's an average growth rate of 37% for the past 11 years. Amazing indeed.

Exactly...couldn't agree more....let keep it all in perspective. Apple is still king of the hill...

 

On another note as other have commented......these articles on AppleInsider about Samsung could almost be considered flame bait....or trolling if one of us if we posted it here....

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post #15 of 36
The US likely has a higher corporate rate than Korea, thus it wouldn't face tax consequences if it were to bring the cash back to Korea.

Also, a large portion of Samsung's sales are outside the US, so a large portion of their cash is almost certainly outside the US as well.
post #16 of 36
Can't wait for Sammy's investors to demand their share!
post #17 of 36
Quote:
Originally Posted by Sacto Joe View Post


Dude, lighten up. It's important to know this kind of stuff. And as a news aggregator, Apple Insider is just doing its job.

yeah I agree....but when this gets posted or quoted in other threads then most of the people here claim this is a all pro Apple site and it doesn't belong here.

I will go back to drinking my coffee now.....

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post #18 of 36

got to hand it to them. they knew which company to copy.

post #19 of 36
Quote:
Originally Posted by TeaEarleGreyHot View Post

I wonder what fraction of Samsung's $29B is trapped in the USA, lest they have to pay taxes to repatriate the money to Korea? Or doesn't Korea tax money in that way? Does Samsung face tax consequences similar to Apple's?

 

According to Samsung's sustainability 2012 report[1], their taxes & due was 4.256T (KRW) and 16T in profit. So that's around 25+%.

 

Apple on the other hand paid $6B (USD) in taxes on $41.7B profit or 14% in the 2012 fiscal year.  I think the NYT once claimed that Apple's effective rate was 9.x% for 2011.  

 

[1] http://www.samsung.com/us/aboutsamsung/sustainability/sustainabilityreports/download/2012/2012_Facts_and_Figures_FINAL.pdf


Edited by tooltalk - 5/8/13 at 8:51am
post #20 of 36

This should put to rest that Samsung's Galaxy sales numbers are based only on shipment and not real sales. If they only ship and do not sell, they would not be accumulating so much cash.

post #21 of 36

It's shame that they accumulated that much of cash.

They first need to treat their so-called contracted companies better. You will know what this means.

Also are the salary of their employee rational for their income? I believe it's far below than expected.

post #22 of 36
Quote:
Originally Posted by AZREOSpecialist View Post

Is this SamsungInsider?

Samsung's cash position is a relevant story for Apple. They are one one of Apple's chief competitors, and that kind of a cash pile gives them strategic options that Apple would care about.

post #23 of 36
Quote:
Originally Posted by lkrupp View Post

All designed to keep the clicks flowing and advertising dollars coming.

That's Google not Samsung.
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post #24 of 36
Quote:
Originally Posted by ankleskater View Post

This should put to rest that Samsung's Galaxy sales numbers are based only on shipment and not real sales. If they only ship and do not sell, they would not be accumulating so much cash.

They could just report the volume data like Apple does, and let us future it out for ourselves.....

post #25 of 36
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Originally Posted by dasanman69 View Post

That's Google not Samsung.

He means that's AppleInsider's source of income.

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post #26 of 36
Quote:
Originally Posted by malta View Post

I guess there is money to be made in only shipping phones and never selling them.

It's not up to them to sell the phones to the end user, the phones are sold to retailers. The money they're making is coming from somewhere, is it not?
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post #27 of 36
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Originally Posted by SolipsismX View Post

He means that's AppleInsider's source of income.

Gotcha. Nothing wrong with AI trying to make some money of their own.
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post #28 of 36
Quote:
Originally Posted by SolipsismX View Post


That's not true. If you post something in context and in a reasonable way you're get reasonable responses from reasonable people, but if you jack a thread just to create havoc expect the community to respond in kind.

It is true....you know this to be true. Numerous people have posted this and you know it. If something pro Samsung is posted here...then that person is usually chastised for posting that information on a pro Apple site.

So you mean to say that if I started a thread and posted how well Samsung or Google is doing you would have no problem with it?

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post #29 of 36
Quote:
Originally Posted by Buzzz View Post


Here is a bit of Samsung's iffy history with Korea's tax agency.
http://www.nytimes.com/2009/12/30/business/global/30samsung.html?_r=0

Talk about trolling... The linked article is about a Samsung executive who was caught evading taxes and pardoned.  It has nothing to do with the company's taxes.  I'm sure there have been apple employees who have cheated the government on their taxes (with as many employees as apple has, it's bound to have happened), but I wouldn't point at that and say that apple is cheating the government out of taxes.  A company is not responsible for every action their employees make, particularly those made "off the clock".

 

Phil

post #30 of 36
Quote:
Originally Posted by joelsalt View Post

They are even copying Apple's cash-hoarding now ¡

Now that's funny.
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"I got the answer by talking in my brain and I agreed of the answer my brain got" a 7 yr old explaining his math HW
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post #31 of 36
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Originally Posted by majjo View Post

Still highly one sided though. I mean, in this thread alone, there are 3 biased one liners against Samsung, claiming their money is 'dirty', that all their R&D is stolen from apple, and that their phones are only shipped, not sold. Of those, only one person called out the R&D comment. And he was attacked for it later on in the thread.

Make a similar post about how apple only steals their R&D from xerox and see how many people denounce you for it.

Yes but you are free to attack and question them just the same.
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post #32 of 36
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Originally Posted by majjo View Post

Still highly one sided though. I mean, in this thread alone, there are 3 biased one liners against Samsung, claiming their money is 'dirty', that all their R&D is stolen from apple, and that their phones are only shipped, not sold. Of those, only one person called out the R&D comment. And he was attacked for it later on in the thread.

Make a similar post about how apple only steals their R&D from xerox and see how many people denounce you for it.

That's not what one-sided means. You can say it's unbalanced in favour of Apple, and I'd wholeheartedly agree, just as other forums are clearly in favour against Apple.

But are those comments that Samsung only ships and doesn't sell reasonable comments? I've stated many times that regardless of whether they only report shipped numbers that it's impossible for Samsung to make so many devices they aren't selling. You can't ship 50 million Galaxy S3's without selling nearly all of them.

Channel stuffing only goes so far and it's a short term goal usually shore up quarterly reports. I've also stated that Apple surely does it, too, albiet likely to a lesser extent as they appear to sell most if not all of their product as soon as they can make them, but the same can likely also be said for Samsung's higher end smartphones. What these two companies probably do is leverage their popularity for the other end of this same tactic by getting retailers to commit to higher volumes than they initially want to get that sale on the books. With channel stuffing they usually offer a discount, but with Samsung and Apple's popularity they likely don't have to do any such thing. Same effect, but different leverage.

I've stated this in the past and don't recall getting blasted by reasonable posters. Do you think I'll get blasted now for stating positive things about Samsung?

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post #33 of 36
Quote:
Originally Posted by SolipsismX View Post

I questioned your reading comprehension. Again, if thumbing up the exact same 2 sentence statement just minutes earlier wasn't a red flag then I question your ability to know what is or isn't reasonable when one states something for or against Apple, Samsung, et al. It calls into question your awareness of what is actually being discussed.

This is not dissimilar when Apple announced a 7.85" iPad mini and then claimed that Steve Jobs stated they'd never make a 7" tablet, even quoting what he said about the current lot of 7" tablets being DOA.

I don't recall anyone claiming SJ said that they would never make a 7" tablet, but he did insinuate that they wouldn't make one smaller than the iPad.
Quote:
Apple has done extensive testing, really understand this stuff. Limits to how close you can place elements for usability. Why 10" is minimum size for great tablet apps.

It was smart of Apple to deviate from that mindset because the mini is a great device, and there was obviously a big market for it, which you can add me to.
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"Just because something is deemed the law doesn't make it just" - SolipsismX
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"I got the answer by talking in my brain and I agreed of the answer my brain got" a 7 yr old explaining his math HW
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post #34 of 36
Quote:
Originally Posted by majjo View Post



Make a similar post about how apple only steals their R&D from xerox and see how many people denounce you for it.

Now that's funny.
post #35 of 36
Quote:
Originally Posted by SolipsismX View Post

Your comment was clearly deleted because it made a foolish claim not because it was against Apple. Your inability to see the difference is what makes your comments so unreasonable and deemed trollish.

 

My recollection, though it could be flawed, is that I didn't make a 'claim', but merely pointed out the rather discourteous treatment of Microsoft, given the assistance it lent Apple in the past.

post #36 of 36
Quote:
Originally Posted by SCProfessor View Post

I'd like to know how much of Sammy's profits came from making parts for Apple.

 

In the middle of 2012, reports were saying that Apple accounted for 7.5% - 8.8% of Samsung's Semiconductor business.... made up of purchasing displays, memory, and CPUs.  

 

(Samsung's next highest customer was HP, at 3.2%, btw.)

 

Six months later, by the end of 2012, the picture was a bit different.  Apple had only spent about 3/4 of the earlier predicted amount on parts, and Samsung had jumped ahead of Apple as the world's largest parts consumer.  So Samsung might've become its own best customer.

 

The biggest hit seemed to be with Apple dropping Samsung for displays, which no doubt helped lower that subdivision's revenues by about 8%.

 

As for CPUs, I think that Apple still uses Samsung to make those to the tune of about $2B a year, or about 10% of that subdivision's revenues, IIRC.

 

Anyone with more, later figures, please jump in.

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