Samsung Electronics, the world's largest maker of memory chips, televisions and flat screens, estimated Friday that its operating profit hit a new high in the fourth quarter last year due to brisk sales of smartphones.
A model poses with the new Samsung Galaxy S II LTE smart phone during its launch ceremony at the headquarters of Samsung Electronics in Seoul, South Korea, on Sept. 26, 2011. (Xinhua/Park Jin Hee)
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The fourth-quarter result was the largest in the company's history. The previous record was 5.01 trillion won tallied in the second quarter of 2010.
The fourth-quarter sales were estimated at a new high of 47 trillion won (40.63 billion U.S. dollars), up 13.88 percent from the previous quarter, and up 12.25 percent from a year before.
Samsung's revenue kept expanding last year, with 36.99 trillion won in the first quarter, 39.44 trillion won in the second quarter and 41.27 trillion won in the third quarter.
For the whole year of 2011, sales were estimated at a fresh record of 164.7 trillion won (142.39 billion U.S. dollars), up from 154.63 trillion won in 2010. The preliminary estimate for operating profit was 16.15 trillion won (13.96 billion U.S. dollars), down from 17.3 trillion won in 2010.
Samsung did not unveil its estimate for net profit and performance for each division. The final results will be announced later this month.
The fourth-quarter operating profit was largely in line with market forecast as experts expected solid demand for Samsung's smartphones to drive up the company's earnings to a record high.
"Samsung's smartphone sales are estimated at 28 million units in the third quarter last year. A further jump to 35 million units is anticipated in the fourth quarter. The company should retain its market leadership thanks to LTE phone release in 2012," Kim Young-chan, an analyst at Shinhan Investment Corp., said in a report before the earnings guidance was released.
Kim forecast that Samsung's smartphone sales will surge 98.3 percent on-year to 160 million units in 2012, saying that synergies with mobile parts such as mobile DRAM, NAND flash memory and AMOLED should be maximized this year. The analyst expected Samsung's operating profit to reach a new high of 20.5 trillion won this year.
Meanwhile, one-off factors such as reversal of allowance and disposal of HDD business also contributed to Samsung's operating profit, analysts said. Samsung sold its HDD unit to Seagate Technology for 1.38 billion dollars last year.
"A total of 900 billion won was estimated to be reflected in the fourth-quarter operating profit as one-off factors. Samsung was estimated to sell its HDD business at a profit of 700 billion won, while reversing its allowances worth 200 billion won earmarked for royalty costs after reaching an amicable settlement on cross-licensing with Microsoft," said Seo Won-seok, an analyst at Korea Investment & Securities in Seoul.
VietNamNet/Xinhuanet
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