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Q1 Earnings Reports For Industry Giants Paint MIxed Picture

5/05/2013 08:00:00 PM Eastern

NEW YORK – It is earnings season once again and four CE industry giants reported within days of each other – Apple, Amazon, Samsung and LG – with investors, customers and pundits being able to contrast, applaud or express concerns in side-by-side comparisons.

For Apple, it was higher sales but apprehension on how the company could continue to grow. At Amazon the buzz was around lower earnings and the possible impact of the pending Internet tax legislation put on the fast track by Congress. Samsung had the happiest overall story: higher sales and profits due to smartphone sales. And while LG had higher smartphone sales, profits were lower.

Apple sold more iPhones and iPads in the first quarter than last year, and it posted quarterly revenue of $43.6 billion compared with $39.2 billion in the year-ago quarter. Profits were $9.5 billion, down from the net profit of $11.6 billion last year.

Apple sold 37.4 million iPhones in the quarter, compared with 35.1 million in the year-ago quarter. It also sold 19.5 million iPads during the quarter, compared with 11.8 million in the year-ago quarter. Mac unit sales were flat at about 4 million, just about the same as last year’s first quarter.

Amazon.com said continued investments in content and the impact of unfavorable foreign exchange rates let to a sharp drop in first-quarter earnings: Net income was off 37 percent to $82 million, while net sales climbed 22 percent to $16 billion. Unfavorable exchange rates shaved 2 percentage points from the sales tally.

In North America, net sales rose 26 percent and operating income increased 31 percent. Media accounted for $2.5 billion in sales, up 14 percent, while sales of electronics and other general merchandise increased 64 percent to $4.1 billion.

Samsung Electronics probably had the best quarter of all four companies, with higher revenues and net profit based in part on strong smartphone sales in the first quarter. Revenues were 52.87 trillion won on a consolidated basis for the first quarter compared with the prior year’s 45.27 trillion won. Net profit was 7.15 trillion won compared with the prior year’s first-quarter profit of 5.05 trillion won.

Highlighting the quarterly performance, the IT and mobile communications (IM) division, which comprises the mobile communications, networks and digital imaging businesses, achieved profitable results, Samsung said.

The IM division rang up the first quarter with revenues of 32.82 trillion won, higher than the prior year’s 22.47 trillion won. Sales of Galaxy S III and Galaxy Note II devices aided profit margins for mobile communications.

For TV panels, Samsung said demand is likely to rise toward the end of the second quarter and the company will focus its energies on enhancing its premium product portfolio, including large-size TV panels more than 60 inches in size. In OLED panels, continued growth momentum is expected with the launch of new products in the premium smartphone category.

The IM division registered operating profits of 6.51 trillion won on 32.82 trillion won in revenue for the March quarter. Out of the total IM revenue, the mobile business was accountable for 31.77 trillion won in sales.

The consumer electronics division posted an operating profit of 230 billion won for the quarter on revenues of 11.24 trillion won.

LG Electronics shipped 10.3 million smartphones – its highest since it entered the category — and had higher company revenues due to better than expected mobile sales, but profits declined in the first quarter due to weaker results in the home entertainment business.

First-quarter operating profit of $322.9 million and net profit of $20.3 million declined somewhat from the same period last year. However, revenues in the first quarter rose 6.8 percent year over year to $13.01 billion mainly due to its mobile business.

LG Home Entertainment Company revenues of $4.77 billion declined year on year due to lower sales of plasma TVs and IT products. Operating profit of $27.68 million, although lower than last year, increased compared to the previous quarter.

LG Mobile Communications Company results improved significantly in the first quarter, recording revenues of $2.96 billion on smartphone shipments of 10.3 million units, an increase in revenue of 28.5 percent from the same period last year.

Healthy sales of LTE smartphones, such as the Optimus G and Optimus G Pro along with 3G smartphones including the Optimus L Series and Nexus 4, contributed to the improved results, LG said.

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