Operating-margin gap between Samsung, Apple likely to decline

[THE INVESTOR] The operating-margin gap between South Korean tech giant Samsung Electronics and California-based Apple is likely to reduce to a record low level in the April-June period.

Samsung Electronics said in its earnings guidance for the three-month period that it posted 8.1 trillion won (US$7 billion) of operating income and 50 trillion won of revenue during the three months. Based on the estimated figures, the operating margin of the Korean firm will come in at 16.2 percent, the second highest after 17.2 percent Samsung recorded in the third quarter of 2013.

 

Samsung’s operating margin dropped to a record low, at 11.52 percent, in the fourth quarter of 2015 while the operating-margin gap with its rival Apple widened by 20.34 percentage points during the same period.

Apple has maintained a double digit operating-margin gap with Samsung for years, but its profit margin dwindled since the fourth quarter of 2015 due to the sluggish sales of iPhones, including the budget model iPhone SE.

The US firm’s operating margin in the second quarter this year is expected to stand at 26 percent or 27 percent, according to industry data.


By Kim Young-won (wone0102@heraldcorp.com)