Samsung profits up and HTC profits down, with work needed from both

July 5, 2013
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We are getting a look at upcoming earnings reports from both Samsung and HTC and they are each telling opposite stories. While the details for both Samsung and HTC are unaudited, they should match up closely with the official details that will be revealed later in the month. With that in mind, Samsung is showing a year-over-year profit increase of 47 percent while HTC is showing a year-over-year profit decrease of 83 percent.

The interesting twist here is that while Samsung is up year-over-year, things aren't looking perfect in the eyes of the investors. In fact, the Samsung earnings are being noted as "disappointing." More to the point here, Samsung shares had dropped more than 3 percent on Friday and have dropped 17 percent since June.

Some Samsung investors are worried the company is spending and focusing more on promotion as opposed to research and development. Touching on that, Samsung has recently been spending more on marketing as compared to R&D -- something they haven't done in three years time. Anyway, while things may not be perfect in the eyes of Samsung investors, it doesn't appear to be all doom and gloom. Jung Sang-jin who is a fund manager at Dongbu Asset Management has said that while Samsung's growth has slowed due to "disappointing sales of the S4" they still have "some exciting stuff" in the works.

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Shifting over to HTC and we see reports showing a net income of NT$1.25 billion ($42 million). Despite some crediting the Samsung issues with slow Galaxy S 4 sales, it seems the handset may have also had an effect on HTC. The company had been showing an increase in revenue going from April to May, however that didn't continue moving into June. HTC reports show an increase of 23 and 48 percent for April and May, however that dropped 24 percent going from May to June.

Bottom line here, it looks like both Samsung and HTC have some work to do moving forward. In the meantime, we looks forward to seeing the official earnings reports arrive later in the month. We are also curious to see what (if any) effect the HTC One Mini will have in terms of upcoming earnings reports for the company.

SOURCE: Reuters, HTC


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