From DailyTech: Founded in 1969, the Samsung Electronics Comp., Ltd. (KRX:005935) (KRX:005930) is by far the largest company in South Korea with a market cap of $176.8B USD. It also happens to be the world's top smartphone producer and second place in tablet sales. So when it shows signs of trouble, it's a major concern for investors.
Such was the case early this month when Samsung delivered its earnings forecast, predicting the first dip in profit in two years. (Samsung delivers its earnings report relatively late, so it offers an early unaudited estimation to give analysts a jump on their work.)
On Thursday Samsung put Q4 2013 officially in the books, and left more optimistic analysts cursing. A survey by Thomson Reuters I/B/E/S of analysts taken earlier in January following Samsung's guidance release predicted a W10.3T (~$9.53B USD) operating profit, which would have set a record. Dow Jones Newswires' analyst survey came in just slightly lower at W9.65T ($8.93B USD).
Instead Samsung posted operating profit of just W8.31T ($7.69B USD), a substantial miss, even in the wake of the gloomy forecast. Net profit (profit after taxes) was down roughly one trillion Won from the previous quarter, at W7.24T ($6.7B USD). Revenue was up slightly, at a record W59.28T ($54.87B USD).
A strengthening South Korean Won (KRW) was partly to blame. Low inflation pushed the value of the currency, meaning Samsung was getting less Won when it pulled in revenue from Europe and the U.S.
A display of gratitude and generosity towards the company's employees also impacted profit. In honor of the twentieth anniversary of Chairman Lee Kun Hee unveiling a new vision for the company -- a vision that has driven it to unbelievable new heights -- Samsung gave a W800B ($741M USD) bonus to employees.
One traditionally weak unit -- the consumer electronics (CE) unit -- was actually a success story for the Korean OEM. The category, which includes appliances such as refrigerators, dishwashers, and ranges, plus televisions soared. Samsung reported a 90 percent increase in quarter-on-quarter (QoQ) TV revenue, which help drive profits for the unit up 88 percent. The growth in the appliance market wasn't quite as explosive, but was respectable, as well.
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