Samsung reports strong profits for 4Q12

Samsung Electronics has posted revenues of KRW56.06 trillion (US$51.9 billion) on a consolidated basis for the fourth quarter ended December 31, 2012, up 7% sequentially. Consolidated net profit for the quarter hit a record at KRW7.04 trillion, with the full-year 2012 operating profit coming to KRW29.05 trillion won on revenues of KRW201.10 trillion.

Samsung's Mobile Communications business generated quarterly revenues of KRW27.23 trillion won, rising 4% compared with the previous quarter. The company said the growth was mainly driven by solid sales of its GALAXY S IIl and GALAXY Note ll. Operating profit for IT & Mobile Communications, which encompasses four business units including Mobile Communications, was KRW5.44 trillion on revenues of KRW31.32 trillion.

"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.

"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 added. Yi also expressed caution over the continued strength of the Korean won in 2013.

Samsung's lineup of LED TVs, including premium models targeting advanced markets and TVs tailored to emerging markets, has also improved quarter-on-quarter earnings, the company said.

On the components business side, demand for PC DRAM remained weak but growth of high value-added products such as server and mobile DRAM was constant due to increased sales of mobile devices, Samsung said. While the Semiconductor Business landed profits in the quarter, the Display Panel segment struggled, as demand for IT panels for notebooks and monitors remained slow. On the other hand, profitability in LCD panels for TVs and OLED panels for smartphones prevented wider losses.

As for this year's capital expenditure, the size of investment is expected to be similar to that of 2012, Samsung said, adding that the weakening global economic recovery and looming market uncertainties are anticipated to weigh on plans for investment and performance this year.