Samsung sees 10% profit growth on better-than-expected sales of flagship Galaxy S7

Posted:
in iPhone
On the heels of the launch of the Galaxy S7 and S7 Edge, Samsung Electronics issued preliminary guidance on Thursday saying it expects profits to grow more than 10 percent for the first quarter of 2016, exceeding market expectations.

Galaxy S7
Samsung Galaxy S7


Samsung's new guidance calls for consolidated operating profit of 6.6 trillion Korean won, or $5.7 billion U.S. That would be a 10.4 percent increase from a year prior.

It's also above consensus estimates from investors, who expected profits of 5.53 trillion won, according to polls conducted by Bloomberg. It's estimated that the S7 lineup sold 9 million units in their first month, tripling that of the previous-generation Galaxy S6.

In contrast, Apple sold 13 million iPhone 6s and iPhone 6s Plus units in just one weekend when both devices launched last September.

The S7 lineup launched in March and was met with positive reviews, with critics praising Samsung's hardware and design. The handset's software --?primarily Samsung's proprietary TouchWiz interface -- were said to be the weak points for the devices.

Facing high-end competition from Apple and being attacked at the low-end by Chinese manufacturers, Samsung has faced two straight years of declines in its mobile business. The first-quarter turnaround comes after Samsung has made efforts to streamline its lineup and focus on its most competitive devices.

Samsung will face even tighter competition in the mid-range market, especially in emerging markets, thanks to the launch of Apple's new 4-inch iPhone SE. Priced starting at $399, it's the most affordable new iPhone model Apple has ever introduced.

On the high end, Samsung's Galaxy S7 and S7 Edge are expected to face competition from Apple's "iPhone 7" beginning this fall. If Apple sticks to its usual release schedule and strategy, the next iPhone should feature an all-new design and A10 processor, and launch starting at $649 without contract this September.
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Comments

  • Reply 1 of 61
    foggyhillfoggyhill Posts: 4,767member
    Considering their profits have gone down the tube for 2.5 years, that's not saying much.
    But, at least it arrests the constant slide they had.
    caliration al
  • Reply 2 of 61
    19831983 Posts: 1,127member
    foggyhill said:
    Considering their profits have gone down the tube for 2.5 years, that's not saying much.
    But, at least it arrests the constant slide they had.
    Yes, and if they can show good sales and profits of their flagship models in this 'saturated' market. Maybe the iPhone 7 will do better for Apple than expected too, so 'peek iPhone' will be broken this year rather than next.
    netmage
  • Reply 3 of 61
    theothergeofftheothergeoff Posts: 2,074member
    am I reading that right that the guidance is 20% bump in profit over the analysts' expectations.

    That's significant... a definite bounce... but we'll see if it goes up (which would be a good thing in some respects, indicating that high end phones are still in demand), or if it bounces downward again (that this is a 3 month blip that is still part of a Blackberry/RIMM like cratering).
  • Reply 4 of 61
    spice-boyspice-boy Posts: 630member
    Good for Samsung, the better that company's phones get the more pressure Apple is under to make the iPhone even better. 
    AI_lias6SgoldfishiSalmanPakChris46
  • Reply 5 of 61
    rogifan_newrogifan_new Posts: 3,492member
    I'm seeing a lot of BYGO on the new phones I wonder if this profit bump is really due to the new phones.
  • Reply 6 of 61
    redefilerredefiler Posts: 323member
    Actual sales numbers, or it didn't happen.
    palominebrakkennostrathomas
  • Reply 7 of 61
    ddawson100ddawson100 Posts: 446member
    10% is great growth but it would be much more helpful to have in context. 10% of what? That's a critical piece missing from this figure.
    calibrakkenpscooter63
  • Reply 8 of 61
    calicali Posts: 3,495member
    People are still buying these Korean knockoffs?!!

    SMH. Faith in humanity lost.
    nolamacguybrakken
  • Reply 9 of 61
    cnocbuicnocbui Posts: 3,613member
    I'm seeing a lot of BYGO on the new phones I wonder if this profit bump is really due to the new phones.
    Name the places you can get this.  I have only seen reference to two US carriers that offered this for a very limited time period.  It is not a world-wide phenomenon and i think it likely the cost of this was entirely being met by the two carriers who were just piggybacking on the announcement interest in order to try and grab some new customers.

    Orders for the S7 are reportedly up in the Netherlands 250% compared to the S6, and over 60% of those are for the more expensive Edge version.  Carphone Warehouse in the UK said orders were up 200%.
    singularity
  • Reply 10 of 61
    Welcome to 2013, Samsung, the last time you ever posted this much profit.
    patchythepirate
  • Reply 11 of 61
    jungmarkjungmark Posts: 6,575member
    What Sammy meant is they will cook the books to show a 10% gain. 
    patchythepirate
  • Reply 12 of 61
    hammerd2hammerd2 Posts: 50member
    200% order rise from f all is still only 3 f alls. 

    If I were a Samsung investor I doubt I'd be turning cartwheels over a 10% rise in 'consolidated operating profit'. There's a lot of accountancy double dealing to play with behind that phrase. 
    brakkenpatchythepirate
  • Reply 13 of 61
    alumisalumis Posts: 7member
    Not to bash or troll on this but isn't a 10% increase YOY after the S6 disaster really not al that big a deal.

    It's kind of like M$ moving a bunch of copies of Windows 10 after the Win8 debacle.  It's good.  But only because up is the only way to go.
    jackansicali
  • Reply 14 of 61
    jason98jason98 Posts: 759member
    You see, Tim, all it takes to return a company to growth is just making something best in business for a consumer: namely the camera (http://www.dxomark.com/Mobiles/Samsung-Galaxy-S7-Edge-Mobile-Review-A-new-champion) and the screen: (http://www.displaymate.com/Galaxy_S7_ShootOut_1.htm#Conclusion: "the Galaxy S7 becomes the Best Performing Smartphone Display that we have ever tested").

    When was the last time iPhone had something best in the industry? 
    2010, iPhone 4 - Retina display
    2013, iPhone 5s - Touch ID

    And when do you say are going to upgrade the screen? 2018?
    Tim, with all respect you should leave.
    jackansi6Sgoldfish
  • Reply 15 of 61
    sirlance99sirlance99 Posts: 1,097member
    cali said:
    People are still buying these Korean knockoffs?!!

    SMH. Faith in humanity lost.
    What else are they supposed to buy? Believe it or not, not everyone is like us and likes/love iPhones/iOS. It good to have choices. 
    domino676Sgoldfish
  • Reply 16 of 61
    cnocbuicnocbui Posts: 3,613member
    hammerd2 said:
    200% order rise from f all is still only 3 f alls. 

    If I were a Samsung investor I doubt I'd be turning cartwheels over a 10% rise in 'consolidated operating profit'. There's a lot of accountancy double dealing to play with behind that phrase. 
    I didn't see anyone here complaining the pre-orders for the SE were f'all.  Those amounted to 3.4 M.  Pre-orders for the S7 in China hit 10 M in 4 days.
    singularity
  • Reply 17 of 61
    nolamacguynolamacguy Posts: 4,758member
    holy crap that phone on top looks nearly identical to an iPhone 6. had to do a double-take.
    ai46jackansilostkiwianantksundaram
  • Reply 18 of 61
    robmrobm Posts: 1,068member
    Well, I had a charging issue with my iPhone 6s and was given a loaner - a Sammy s6 for 2 and half weeks.

    I dunno - there's carrier software, Microsoft software, Google software and then the OS - all of it running and doing stuff.
    I figured out how to disable most of the unnecessary crap.
    Apple may have a few niggles here and there on the hardware but their software is miles ahead.
    ohh and those pages and return buttons v nearly drove me insane.

    So happy when I got my 6s back.
    cali
  • Reply 19 of 61
    lostkiwilostkiwi Posts: 578member
    holy crap that phone on top looks nearly identical to an iPhone 6. had to do a double-take.
    Yeah my thoughts too. 
    All of the tech press fawning over 'Samsungs amazing industrial design'.... and really they are just back to copying the iPhone?  The Verge gurgling about an Android Renaissance?

    Hopefully the new iPhone this September will have a groundbreaking new design (don't ask me what it will look like - I'm not an Apple engineer!) and we will see how the Android designers fare then. I'm guessing they will somehow look pretty similar. 
    edited April 2016 nolamacguy
  • Reply 20 of 61
    dasanman69dasanman69 Posts: 12,968member
    cali said:
    People are still buying these Korean knockoffs?!!

    SMH. Faith in humanity lost.
    Lately I've seen more Samsung Galaxy S phones than iPhones, so people are buying them. 
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