Samsung Has Net Profit Drop, Still Insanely Profitable

November 18, 2015 - Written By Daniel Fuller

Just about everybody reading this blog is going to be at least passingly familiar with Samsung’s mobile devices and a good number of you are aware they have other branches. If you can imagine it, Samsung likely either has manufactured it or still is, from appliances to laptops to barges. A net operating profit for the whole of the Samsung Group conglomerate is projected to be about $23.36 billion this year, which is, to be sure, a mind-boggling amount of money. This is, believe it or not, a bit of a letdown. The total figure has managed to drop 5.5 percent from last year.

Samsung has spent the year in a whirlwind of public success, restructuring and exiting entire market segments, with hard drive motors falling by the wayside and cuts being made to their power business, among other branches. Despite the runaway success of the Galaxy line, due to the relatively low net profit compared to their other branches, some analysts are predicting that Samsung will call it quits on the smartphone biz in the next five years. While you may be recoiling in disbelief, it’s not all that unlikely, all things considered.

Samsung’s downswing in profit has a large number of reasons behind it, with the main causes being a mystery. Arguments range from poor management to shutdown of profitable departments and even accusations that the smartphone arm is hemorrhaging money, fueling the fire behind doomsday prophecies for Samsung Mobile. Whatever the case, while changes will have to be made to ensure future profitability, this net loss is no reason for shareholders, fans or employees to hit the panic button.

Samsung Electronics is actually up 8 percent in total, mostly from OLED displays and semiconductors. After a tepid year for the most part, Q4 2015 is projected to bring the department an incredible 29 percent upswing. Despite shutdowns in subdepartments, Samsung Electro-Mechanics is actually projected to see profit growth from about $1.5 million to a comparatively staggering $291.7 million. These results show this year not as cause for declaration of a state of emergency, but as a learning experience for the behemoth that is the Samsung Group.