BackSamsung posts record quarterly profit on phones, Seagate deal
Samsung posts record quarterly profit on phones, Seagate deal
PremiumPhoto: Bloomberg
Seoul: Samsung Electronics Co. Ltd reported a record quarterly profit on surging sales of Galaxy phones and a one-time gain from selling its hard-disk drive business.
Mobile-phone sales surpassed a record 300 million units last year as Galaxy smartphones helped win consumers amid competition with Apple Inc.’s iPhone.
Samsung, which sold its hard-disk drive business to Seagate Technology Plc, is introducing more mobile devices to offset slumping profits at the chip and flat-screen panel businesses.
“The mobile business is generating a huge chunk of profit now," James Song, a Seoul-based analyst at Daewoo Securities Co., said over the telephone. “It may be getting harder for Apple to catch up because they only have a limited number of models."
Samsung shares fell 1.4% to 1,040,000 won at the close of trading in Seoul, while the benchmark Kospi index declined 1.1%. The stock has gained 11% in 2011.
“While smartphone sales helped propel Samsung’s revenue to a record last year, fourth quarter operating profit was inflated by proceeds from the Seagate deal," James Chung, a Seoul-based spokesman for the Suwon, South Korea-based company, said over the telephone after the announcement.
Samsung had said in April it agreed to sell its mechanical- drive business to Dublin-based Seagate for $1.38 billion in cash and stock. Samsung said last month the sale was completed.
Operating profit may be 200 billion won higher or lower than Friday’s preliminary estimate when audited results are announced later this month, Samsung said.
Samsung’s full-year profit sales rose 6.5% to a record 164.7 trillion won, while operating profit declined 6.7% to 16.2 trillion won.
Operating profit at the telecommunications unit jumped 81% to 2.6 trillion won, according to the median of six analyst estimates surveyed by Bloomberg. Sales may have gained 36% to 16.45 trillion won.
Samsung overtook Apple in the third quarter to become the world’s largest smartphone seller after shipping 27.8 million units, market researcher Strategy Analytics said in October. Samsung’s smartphone sales more than tripled during the three-month period from a year ago, and its market share more than doubled, it said.
Samsung probably sold about 32 million smartphones in the fourth quarter, according to an estimate from Dongbu Securities Co., helped by the Galaxy range of devices. Galaxy S II sales, which began in May, surpassed 10 million units quicker than any other Samsung mobile device, the company said in a December statement, without providing a total sales figure for the model.
“They’ll probably roll out more low-end smartphones this year after focusing on high-end models last year," said Kim Hyung Sik, a Seoul-based analyst at Taurus Investment Securities Co. “By the end of the year, they’ll climb to the top in overall handsets."
Profit at the semiconductor division probably fell 11% to 1.6 trillion won on sales of 9.65 trillion won, according to the survey.
The company’s display division likely had an operating profit of 6.5 billion won, compared with 100 billion won a year earlier, according to the survey. Sales probably rose to 7.95 trillion won from 7.2 trillion won.
Samsung’s TV-making unit likely had an operating profit of 170.5 billion won, compared with a loss of 170 billion won a year ago, helped by high-end models featuring 3-D functionality and Web-based services, according to the survey. Sales are estimated to have risen to 16.1 trillion won from 15.97 trillion won.
Saeromi Shin contributed to this story.
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