Samsung smartphone sales make profits soar

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Samsung smartphone sales make profits soar

Jennifer Scott

Samsung profits soared in the fourth quarter of 2012 due to the success of its smartphone business.

The South Korean company reported revenues of over 56tn Korean won (£32bn) for the three-month period to 31 December, with mobile sales bringing in almost half that figure – 27.23tn Korean won.

Profits for the whole firm were up 76% year on year to 7.04tn Korean won (£4.2bn), but Samsung would not reveal the profit margin on its smartphone shipments or the number of devices it had sold.

However, it did report profit for the IT and mobile communications division – which contains the smartphone business – of 5.44tn Korean won, dwarfing its other subsidiaries.

Admitting to “solid sales” for its flagship devices – the Samsung Galaxy S3 and Galaxy Note 2 – Robert Yi, senior vice-president and head of investor relations, said: “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.”

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

Robert Yi, Samsung

Other areas were less successful. Samsung’s components business suffered due to shrinking demand for PC DRAM – somewhat balanced out by the ramp up in orders for mobile and server DRAM – and the display panel business struggled as less people were ordering laptops and PC monitors.

But the divisions managed to stay in profit due to demand for LCD panels in TVs and OLED panels in smartphones.

Samsung is taking a cautious approach to the year ahead, conceding to keep its capital expenditure at the same level as in 2012.

Its financial statement concluded: “The weakening global economic recovery and looming market uncertainties are anticipated to weigh on plans for investment and performance this year, but despite global economic jitters, Samsung will respond to the market’s ebb and flow with a flexible capital expenditure plan.” 


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