The Korea Herald


Samsung Q4 net up 3.6% on solid smartphone, TV sales

By 박한나

Published : Jan. 24, 2014 - 10:58

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Samsung Electronics Co., the world's top maker of smartphones, said Friday its fourth-quarter net profit edged up 3.6 percent on-year on solid sales of smartphones and TVs.

Net profit came to 7.3 trillion won (US$6.79 billion) in the October-December period, compared with 7.04 trillion won a year earlier, the company said in a regulatory filing.

Sales gained 5.74 percent on-year to 59.28 trillion won, while operating profit edged down 5.95 percent to a record 8.31 trillion won. The figures were in line with Samsung's guidance released earlier this month.

Analysts attributed Samsung's weak operating profit to its massive bonuses paid out to its employees last year to commemorate the 20th anniversary of its so-called New Management Initiative, Samsung's key business strategy.

The rising Korean won against other currencies also weighed down on the performance, inflicting foreign-exchange losses and making Samsung less price-competitive in the global market.

The increased marketing costs amid stiffer competition with rivals at home and abroad also limited Samsung's earnings, analysts added.

For all of 2013, Samsung logged a net profit of 30.47 trillion won, up 27.7 percent from the 23.85 trillion won posted a year earlier.

Its operating income came to 36.79 trillion won, up 26.63 percent from a year earlier, with sales also advancing 13.72 percent to 228.6 trillion won.

Samsung Electronics attributed the yearly improvement to higher sales in memory chips and organic light-emitting diode (OLED) panels, which boasted robust performance amid the prolonged economic slump.

The company said it has also maintained more than a 30 percent market share in major markets, with the number of tablet PC sales growing twofold in 2013 from the previous year.

The tech giant also held market dominance via cutting-edge devices such as the Galaxy Gear smartwatch, which features a 1.63-inch screen and a 1.9 megapixel camera on the strap, and connects to Samsung's Galaxy smartphones and other gadgets via Bluetooth technology.

Samsung also had rolled out a handful of state-of-the-art TVs to prove its technological lead.

On the 2014 outlook, Samsung said although it expects economic improvements in advanced countries such as the United States, foreign exchange volatility still remains a concern for the company.

The demand for its mobile DRAM, however, is expected to gather ground on the back of improved smartphone sales, along with other application processors.

Samsung said it plans to expand its TV sales on the back of premium line-ups, including Ultra HD TVs, curved TVs and large-scale models hovering above 60 inches, and roll out customized TVs in respective markets.

For 2013, Samsung Electronics' facility investment came to 23.8 trillion won, with 12.6 trillion won allocated for its semiconductor business and 5.5 trillion won for the display sector.

Separate market data released by Strategy Analytics earlier this month showed Samsung is anticipated to take up 36.2 percent of the world's smartphone market in the first quarter of 2014, widening the gap with their U.S. and Chinese rivals.

Samsung is expected to continue its dominance with its flagship lineup, such as the Galaxy S4 and the Galaxy Note phablets, the research data said.

The Galaxy Note 3 reached the 10-million milestone in the global market in only two months after its launch in September last year.

Samsung is slated to launch its next Galaxy line-up, presumably the Galaxy S5, around March or April.

Shares of Samsung closed at 1,299,000 won on the Seoul bourse Thursday, slipping 2.18 percent from the previous session's close.

The quarterly results were announced before the stock market opened Friday. (Yonhap)