Booming smartphone sales made Samsung Electronics' latest quarter its most profitable quarter ever, according to the company.
Samsung has announced consolidated revenues of KRW47.3 trillion (US$42 billion) for the fourth quarter ended December 31, 2011, a 13% increase on year. For the quarter, the company posted record operating profits of KRW5.3 trillion. Both figures came in line with its guidance.
"Despite intensified competition amid the global economic slowdown, our Telecommunications businesses continued to post solid earnings with an enhanced line-up of high-end smartphones, resulting in higher average selling price (ASP)," said Robert Yi, senior VP and head of investor relations at Samsung, in a statement. "Moreover, improved profitability and earnings growth of our Set businesses, including smartphones and flat panel TVs led to our company's strong earnings."
Samsung revealed that its telecom division generated record revenues of KRW17.82 trillion in the fourth quarter, up 52% on year, with growth mainly driven by strong sales of its Galaxy series smartphones. Operating profits for the business unit also hit a record KRW2.64 trillion, rising 79% from the same quarter of 2010.
Samsung indicated its chip division suffered weak demand for PC DRAMs during the fourth quarter. However, growth of specialty products such as server and mobile DRAM chips was constant thanks to brisk demand coming from the smartphone and tablet PC sectors.
Samsung's semiconductor business - including memory and system LSI - posted operating profits of KRW2.31 trillion in the fourth quarter, up 29% on year. For all of 2011, operating profits at the unit decreased 27% to KRW7.34 trillion.
The display panel unit, which encompasses LCD business and subsidiary Samsung Mobile Display, reported KRW0.22 trillion in operating losses for the fourth quarter. Losses amounted to KRW0.75 trillion for all of 2011.
While overall profitability at Samsung's components businesses eroded during the fourth quarter, the company pointed out rapid growth in system LSI and OLED panels - regarded as a promising sign for future growth. It did not elaborate further on development of the two segments.
The fourth quarter results brought Samsung's full year 2011 revenues to an all-time high of KRW165 trillion, up 7% from the previous year. However, operating profits and net profits for 2011 declined 6% and 15%, respectively, to KRW16.25 trillion and KRW13.73 trillion.
In addition, Samsung unveiled plans to allocate KRW25 trillion for capital expenditure in 2012, up from the KRW23 trillion spent in 2011. About KRW15 trillion will be invested in its semiconductor business that consists of memory and system LSI, and KRW6.6 trillion allocated for investment in the display panel segment, the company said.
Source:digitimes