Samsung Q4 profit tops forecasts on Galaxy sales

Written by Associated Press | Updated: Jan 26 2013, 07:52am hrs
Samsung Electronics Co. said fourth-quarter profits soared a better-than-expected 76%, boosted by the popularity of its Galaxy smartphones. But the company expects earnings during the current quarter to decline due to seasonally low demand for consumer electronics. It is also leaving its 2013 capital expenditure at the same level as last year, underlining the uncertainty in the demand outlook and concerns about rapidly declining demand for personal computers. Samsung's shares fell about 1% after earnings release.

Net income for the final quarter of 2012 reached 7.04 trillion won ($6.58 billion), a 76% surge of 4.01 trillion won a year earlier. Analysts had expected 6.95 trillion won in income, according to FactSet. Sales rose 19% over a year earlier to 56.06 trillion won and operating income jumped 89% to 8.84 trillion won.

Increased sales of smartphones were the key source of its stellar profit. Samsung, which overtook Apple Inc. as the top smartphone maker last year, said its operating profit from the division that makes and sells smartphones and tablets more than doubled to 5.44 trillion won in the fourth quarter, from 2.56 trillion won a year earlier.

Most analysts believe the Suwon, South Korea-based Samsung, shipped more than 60 million smartphones, including the Galaxy S III and Galaxy Note II, during the three months ending in December, which would put the years smartphone sales at more than 200 million. Apple said it sold 47.8 million iPhones in the quarter.

The companys component divisions that make semiconductor products and display panels also benefited from a rise in demand for smartphones. Sales of mobile processors that power popular devices such as Apples iPhones and Samsungs own Galaxy smartphones boosted the bottom line. The recovery in the display panel division was also led by strong sales of advanced mobile-phone screens called OLED, found in high-end Samsung smartphones. Analysts said Samsung will likely see a continued rise in smartphone sales, especially in low- and mid-priced models where it sees no competition from Apple.