Fri, January 27, 2012
Technology > Technology

Samsung Electronics' operating profit hits new high in Q4

2012-01-27 03:15:47 GMT2012-01-27 11:15:47(Beijing Time)  Xinhua English

Shoppers look at Samsung Electronics devices at the company's showroom in Seoul, South Korea, Friday, Jan. 27, 2012.(Photo/AP)

by Yoo Seungki

SEOUL, Jan. 27 (Xinhua) -- Samsung Electronics, the world's largest maker of memory chips, televisions and flat screens, said Friday that its operating profit hit a new high in the fourth quarter of last year helped by brisk sales of smartphones.

Consolidated operating profit reached a fresh record high of 5.3 trillion won (4.71 billion U.S. dollars) in the fourth quarter, up 25 percent from the previous quarter, according to a regulatory filing. From a year earlier, operating profit surged 76 percent during the October-December period.

The results were larger than the company's preliminary estimate of 5.2 trillion won announced earlier this month, and it breached the previous record high of 5.01 trillion won tallied in the second quarter of 2010.

Sales posted a new high of 47.3 trillion won in the three months ended Dec. 31, breaching the previous record of 41.87 trillion recorded in the fourth quarter of 2010. The fourth- quarter revenue was up 15 percent from three months earlier, and up 13 percent from a year before.

Net profit stood at 4 trillion won in the fourth quarter, up 16 percent from three months earlier. From a year before, net profit was up 17 percent over the same period.

The record earnings results were mainly attributed to strong sales of Samsung's Galaxy smartphones. The telecommunications division that makes handsets and smartphones posted all-time high quarterly sales of 17.82 trillion won, up 52 percent from a year earlier. Operating profit for the telecom business also hit a record 2.64 trillion won, up 79 percent from the previous year.

"Despite intensified competition amid the global economic slowdown, our telecommunications business continued to post solid earnings with an enhanced line-up of high-end smartphones, resulting in higher average selling price (ASP)," said Robert Yi, Samsung's senior vice president.

Shipments of Samsung's smartphones such as its flagship Galaxy S, Galaxy Note and Galaxy Nexus were estimated to increase around 30 percent in the fourth quarter from three months earlier. Samsung expected the global smartphone market to grow by more than 30 percent in 2012.

The semiconductor division, including memory chips, and system LSI, registered an operating profit of 2.31 trillion won in the fourth quarter, up 29 percent from a year before. Revenues reached 9.17 trillion won during the quarter, down 1 percent from the previous year.

The semiconductor business saw demand for PC DRAM remain weak in the fourth quarter, but it sustained high profitability thanks to growth of specialty products such as server and mobile DRAM. Samsung projected demand for PC DRAM to remain weak in the first quarter, but forecast that demand for NAND flash chips, which is a core component in mobile devices such as smartphones and tablet PCs, remain solid with the release of new mobile devices to the market.

Meanwhile, the display panel business recorded an operating loss of 0.22 trillion won on revenue of 8.55 trillion won in the fourth quarter. Samsung expected weak seasonality to dampen demand for flat screens in the first quarter, saying that demand in 2012 was likely to remain stagnant on concerns over the global economy and oversupply.

For the whole year of 2011, Samsung's revenues marked a new high of 165 trillion won, up 7 percent from the previous record of 154.63 trillion won tallied in 2010.

Last year's operating profit was down 6 percent on-year to 16. 25 trillion won, but it was the second-largest in the company's history after 17.3 trillion won tallied in 2010. Net profit amounted to 13.73 trillion won in 2011.

Samsung said its capital expenditure for 2012 was forecast to amount to 25 trillion won, up 2 trillion won from the previous year. Among the total, 15 trillion won will be invested in the semiconductor division, while 6.6 trillion won will be allocated for the display panel segment.

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