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Samsung Electronics sees Q4 ops profit rising 73%

06 January 2012 10:49 (UTC +04:00)

Baku - APA-Economics. Samsung Electronics Co. said Friday it expects its fourth-quarter operating profit to have risen 73% from a year earlier, largely due to robust sales of its smartphones despite slower economic growth in its key markets in the past year, MarketWatch reported.

Samsung, the world’s biggest maker of flat panels, memory chips and flat-screen televisions, and the world’s second-largest handset maker after Nokia Corp., said it expects to report an operating profit of a record KRW5.2 trillion (US$4.5 billion) for the three months ended Dec. 31, up from KRW3.01 trillion a year earlier.

Sales likely rose 12% to KRW47 trillion from KRW41.87 trillion a year earlier, Samsung said in a regulatory filing.

The average forecast in a Dow Jones Newswires poll of seven analysts was for an operating profit of KRW4.56 trillion on sales of KRW44.96 trillion.

Samsung didn’t provide specific details in its earnings guidance but said the estimates may differ from the results because it hasn’t completed an audit. The company is expected to announce the actual numbers and breakdowns of earnings in each of its divisions later this month.

Analysts said the company was boosted by higher sales of mobile phones and high-end televisions in the period, though its component business continued to suffer from falling prices of chips and flat panels.

The recent closing of the deal to sell Samsung’s hard disk drive business to U.S.-based Seagate Technology Inc. has also partly boosted overall income, analysts said. The return of some provisions on royalties to Microsoft Corp. for Samsung’s Android-based smartphones and tablets also helped, they said.

Samsung said in April it would sell its hard disk drive business to Seagate for $1.4 billion in cash and stock, while Microsoft and Samsung reached a patent-sharing deal in September after the U.S. company had pressured Google Inc. and makers of cellphones and tablets based on its Android operating software to recognize that Android incorporates some of its designs, and either pay Microsoft or alter the products.

Despite the murky global economic outlook, analysts expect Samsung to post record sales this year as synergies between its mobile devices and its component businesses will drive a growth in sales of mobile processing chips and advanced flat panel displays.

Samsung didn’t give a net profit forecast in its earnings guidance. The estimates are based on International Financial Reporting Standards.

In the third quarter of 2011, the company had an operating profit of KRW4.25 trillion on sales of KRW41.27 trillion.