Global electronics giant Samsung Electronics Co said yesterday its fourth-quarter operating profits rose 11 percent from the third quarter to 2.05 trillion won (US$2.2 billion), backed by strong performance in its chip and liquid-crystal-display (LCD) operations.
Compared with a year earlier, the operating profit of the world's largest maker of computer memory chips was down 4 percent.
The results were slightly below market forecasts for 2.1 trillion won but the company was at least back above the 2 trillion won level for the first time since the fourth quarter of 2005.
Net profit rose 7 percent quarter-on-quarter but was down 8.5 percent year-on-year to 2.35 trillion won in the period from October to last month.
"Net income rose above market expectations because of buoyant profitability at the company's overseas operations," the company said in a statement.
Sales were a record 15.69 trillion won in the fourth quarter, up 3 percent from the third and 1 percent from a year earlier.
With the results, the company also announced a plan to buy back 1.8 trillion won (US$1.9 million) of its shares over the next three months to help bolster its price.
The stock, which opened to a strong note following overnight gains on Wall Street, jumped 3.61 percent to 603,000 won as investors welcomed the share buy-back plan and robust outlook for this year.
The benchmark KOSPI index on the Korea Stock Exchange gained 1.69 percent.
For the whole of last year, Samsung operating profits fell 14 percent to 6.93 trillion won as sales climbed 2.6 percent to 59 trillion won.
Vice president Chu Woosik said that key products powered a recovery in overall earnings despite price declines in some categories.
Chu said Samsung expected stable performance in the first quarter with higher demand for DRAM and flat panels from the launch of Windows Vista, the new Microsoft computer operating system.
There should also be a sales increase during the Lunar New Year next month and a recovery of profits in the mobile phone business.
"Our key businesses, such as DRAMs, NAND flash memory chips, LCDs, mobile phones and flat-panel TVs will see growth momentum after the first half [of the year] and we expect significant growth both in revenue and profits in the second half," he said.
As for investment, the company plans to spend 8.10 trillion won this year, down 19 percent from last year.
This figure does not include the 1.1 trillion won investment plan by its US unit in Austin, Texas, and the 0.5 trillion won for its TFT-LCD joint venture with Sony Corp, S-LCD, Chu said.
At the same time, it will beef up its research and development activities in order to maintain its technical lead, with 6.14 trillion won set aside for this year, up 10 percent from last year.
Analysts agreed the company would have a better year next year.
"Its operating profit is expected to grow 20 percent this year as the semiconductor and LCD businesses are expected to perk up in the second half," Lee Moon-han of Tong Yang Investment Bank said.
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