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

Posted:
in AAPL Investors edited January 2014
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."
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Comments

  • Reply 1 of 84
    Is this SamsungInsider?
  • Reply 2 of 84
    monstrositymonstrosity Posts: 2,234member
    Dirty money.
  • Reply 3 of 84
    lkrupplkrupp Posts: 9,991member

    Quote:

    Originally Posted by AZREOSpecialist View Post



    Is this SamsungInsider?


     


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

  • Reply 4 of 84
    scotty321scotty321 Posts: 313member
    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.
  • Reply 5 of 84
    teaearlegreyhotteaearlegreyhot Posts: 1,000member
    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?
  • Reply 6 of 84
    chandra69chandra69 Posts: 638member


    Is this Samsung or Samsung Electronics?  

  • Reply 7 of 84
    wjdzmwjdzm Posts: 6member
    "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.
  • Reply 8 of 84
    wjdzmwjdzm Posts: 6member


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

  • Reply 9 of 84
    joelsaltjoelsalt Posts: 827member


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

  • Reply 10 of 84
    chandra69chandra69 Posts: 638member

    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?  


  • Reply 11 of 84
    buzzzbuzzz Posts: 84member
    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
  • Reply 12 of 84
    rogifanrogifan Posts: 10,669member
    What is this Samsung Insider now? Look I know Apple isn't giving you anything to write about right now but why should I care what Samsung's cash balance is?
  • Reply 13 of 84
    maltamalta Posts: 78member


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

  • Reply 14 of 84
    zoffdinozoffdino Posts: 192member


    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.

  • Reply 15 of 84
    suddenly newtonsuddenly newton Posts: 13,808member
    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
  • Reply 16 of 84
    chandra69chandra69 Posts: 638member

    Quote:

    Originally Posted by Rogifan View Post



    What is this Samsung Insider now? Look I know Apple isn't giving you anything to write about right now but why should I care what Samsung's cash balance is?


    What kind of people you all are?  Anything that indirectly and directly relates to Apple can make an entry here on this site.  What is the problem in mentioning about Samsung here?>

  • Reply 17 of 84
    geekdadgeekdad Posts: 1,131member

    Quote:

    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....

  • Reply 18 of 84
    geekdadgeekdad Posts: 1,131member

    Quote:

    Originally Posted by Chandra69 View Post


    What kind of people you all are?  Anything that indirectly and directly relates to Apple can make an entry here on this site.  What is the problem in mentioning about Samsung here?>



    I guess the thing is if one of us posted this here.......we would get BLASTED for doing so.....

  • Reply 19 of 84
    creid1987creid1987 Posts: 21member
    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.
  • Reply 20 of 84
    chandra69chandra69 Posts: 638member

    Quote:

    Originally Posted by geekdad View Post


    I guess the thing is if one of us posted this here.......we would get BLASTED for doing so.....



    Did I say something wrong?

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