Samsung Q4 net profit hits record $6.6B

Samsung Q4 net profit hits record $6.6B

Summary: The South Korean electronics giant booked a 76 percent jump in its fourth quarter net profit, thanks to strong sales of its mobile devices, but warned of headwinds this year.

SHARE:

South Korea's Samsung Electronics has posted a record net profit for the fourth quarter at 7.04 trillion won (US$6.6 billion). This was attributed to strong sales of devices such as its Galaxy S3 and Note 2, but the firm warned of headwinds in 2013, such as higher costs and a stronger won.

Net profit jumped by 76 percent from the previous year. This was on the back of 56.06 trillion won (US$52.4 billion) revenue for the quarter ended December 31, 2012--an increase of 18.5 percent.

Consolidated operating profit increased 10 percent from the previous quarter to hit 8.84 trillion won (US$8.3 billion), also a record high according to a Reuters report.

The latest financial results were in line with Samsung's earnings guidance disclosed earlier on January 8, which estimated fourth quarter consolidated revenues of approximately 56 trillion won (US$52.3 billion) and consolidated operating profit of approximately 8.8 trillion won (US$8.2 billion).

Full-year 2012 operating profit was 29.05 trillion won (US$27.2 billion) on revenue of 201.10 trillion won (US$188.1 billion), according to Samsung in the statement.

For its strong performance, Samsung highlighted its mobile communications business, which generated a quarterly revenue of 27.23 trillion won (US$25.4 billion), an increase of 4 percent compared with the previous quarter. This growth was driven mainly by the strong sales of the Galaxy S3 and Galaxy Note 2 devices, which "beat the popularity of their predecessors with record sales in record time."

"Despite uncertainties in Europe and concerns over the US fiscal cliff creating a difficult business environment, we did our best this quarter to achieve strong earnings based on a strategic focus on differentiated and high value-added products, as well as our technological competitiveness," said Robert Yi, senior vice president and head of investor relations at Samsung.

"Heading into this year, we are expecting a slow recovery in the component business due to reduced capital expenditures, while competition in the set business will intensify further as demand slows and the mid- to low-end market expands," he said, also noting the growing strength of the Korean won.

Samsung also said that the growth spurt in the worldwide smartphone market in 2012 is expected to be tempered by intensifying price competition from the entry of new products.

In the statement today, it predicted that in this year's first quarter, smartphone demand in developed countries would slow down. However, the year would see demand go up in emerging markets--described as a "silver lining"--with the introduction of affordable smartphones and a growing appetite for tablets.

Topics: Samsung, Mobility, Smartphones, Tablets

Jamie Yap

About Jamie Yap

Jamie writes about technology, business and the most obvious intersection of the two that is software. Other variegated topics include--in one form or other--cloud, Web 2.0, apps, data, analytics, mobile, services, and the three Es: enterprises, executives and entrepreneurs. In a previous life, she was a writer covering a different but equally serious business called show business.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

3 comments
Log in or register to join the discussion
  • Kudos to Samsung

    I have a lot of admiration for Samsung. It was a very close call for me between the Nokia and any of the Samsungs. HTC is pretty good too. None of the other companies really interested me much when it came time to buying my phone. So happy with my Nokia Lumia 920 but I know I would have also been happy with either a Samsung WP8 or Android.
    toddbottom3
  • I did my part

    I bought a galaxy S III for my wife and a Note II for myself. The screen size and clarity are significant upgrades over the HTC EVO's that we had
    krossbow
  • Well deserved

    S others like Motorola, strand their best phones on one carrier and further dilute their brands under Carrier brands like Droid, Samsung had the foresight to stick with Galaxy, even at the cost of customized versions, till they had enough leverage to tell carriers to "take it or leave it". Samsung was smart enough to adhere to a long term branding strategy while others screwed around by cow towing to carriers. I think the Galaxy is no better than Droid DNA or Droid Razr, but hey, I cannot get those handsets everywhere, can I?
    flyguy29