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Samsung Gets Q4 Fiscal Reality Check

24 Jan, 2014 By: Erik Gruenwedel

High-flying Korean consumer electronics company — the top smartphone manufacturer — reports flat operating income on soft shipments

Samsung Electronics, the top consumer electronics brand, Jan. 24 reported its first operating income decline since 2011.

The South Korean CE company reported fourth-quarter (ended Dec. 31) flat operating income of $5 billion in its IT and mobile communications unit, which includes its No.1 smartphone market position, compared with the previous-year period. Sales in the mobile division, which include Galaxy phones, increased $2.4 billion to nearly $30 billion.

Meanwhile, Samsung’s vaunted consumer electronics division, which includes TV, Blu-ray Disc players and Galaxy tablets, among other products, saw operating profit decline $37 million to $611 million on revenue of $13.2 billion, which was down 2% from the previous-year period.

The company, which is a fierce competitor in both the market and courtroom with Apple, in March rolls out the Galaxy 5 phablet, a move Apple will counter with two new iPhones slated this year with bigger screens.

"This year, looking at the industry environment, we do expect that the industry will become a bit more difficult with growth slowing down and competition becoming more fierce," executive Hyunjoon Kim, said in the fiscal call with analysts.

Kim said the Galaxy 5 would include a bigger screen than the Galaxy 4, and up tech features such as the S Pen stylus and multiple-screen functionality, among other features.

"We have created this segment, and we are the leaders of this large smartphone segment," Kim said.

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