Samsung Electronics Co, Asia’s biggest maker of semiconductors, flat screens and mobile phones, turned to a profit in the fourth quarter from a loss a year earlier after prices increased and demand for TVs rose.
Operating profit was about 3.7 trillion won (US$3.3 billion), plus or minus 200 billion won, compared with a loss of 740 billion won a year earlier, the Suwon, South Korea-based company said in a statement yesterday.
Samsung shares climbed 77 percent last year as prices of memory-chips tripled on demand for personal computers, and income from the sale of mobile phones and TVs surged. Analyst expectations that continuing sales growth will help the company post record profit this year boosted the stock yesterday to its highest close.
“Chips will continue to be the key driver for earnings growth this year and the TV business will add to momentum amid the global economic recovery,” said Kim Tae-woon, a fund manager at NH-CA Asset Management in Seoul, which oversees the equivalent of US$8.8 billion in assets. “The stock has risen a lot, but it will maintain the current level given the strong earnings outlook.”
Samsung shares fell 1.7 percent to 827,000 won at 12:05pm in Seoul trading, while the benchmark KOSPI index declined 0.1 percent. The stock has gained 3.6 percent this year, extending an 11 percent advance last month, its steepest monthly gain in five months.
“The decline today [yesterday] is probably because some investors are taking profit,” said Lee Sun-tae, an analyst at Meritz Securities Co. “But it doesn’t change the better earnings outlook for Samsung’s businesses for this year.”
The preliminary figures disclosed yesterday are consolidated, meaning they include earnings from overseas affiliates. Revenue was between 38 trillion won and 40 trillion won, Samsung said.
Samsung was projected to post a profit of 3.67 trillion won in the quarter, the median estimate of 18 analysts surveyed by Bloomberg News showed.
It is forecast to post 14.4 trillion won in operating profit on sales of 142.8 trillion won this year, a separate Bloomberg survey of analysts showed. The company’s profit last year was 10.9 trillion won on sales of 136.1 trillion won, based on yesterday’s preliminary results, Samsung said.
Profit from the chip business probably accounted for half of the total operating income in the fourth quarter, compared with a loss a year earlier, a Bloomberg survey of analysts showed. Samsung’s flat-panel division probably posted a profit of 549 billion won, compared with a deficit of 240 billion won a year earlier.
The company’s mobile phone division probably posted operating income that climbed more than five-fold to 724 billion won, while the digital media division, which makes TVs, probably had a six-fold increase in profit to 618 billion won, the survey showed.
Samsung, the world’s largest television maker, said earlier Thursday it aims to increase sales of flat-screen TVs by about 30 percent this year, driven by higher demand for more expensive models.
The company expects LCD TVs using light-emitting diodes as screen backlights instead of conventional fluorescent lights to help drive up shipments.
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