Samsung Electronics reported revenues of KRW 47.3 trillion on a consolidated basis for the fourth quarter of 2011, up 13 percent from a year earlier. Telecommunications was the main driver, with revenues up 52 percent to KRW 7.82 trillion, led by strong Galaxy S II and Galaxy Note handset sales. The group posted operating profit of KRW 5.3 trillion, up 76 percent, including a record KRW 2.64 trillion from the telecom division, up 79 percent year-on-year. Net profit for the quarter was KRW 4.0 trillion, up from KRW 3.4 trillion a year earlier. Samsung said it will invest a total KRW 25 trillion this year, of which KRW 15 trillion on semiconductors and KRW 6.6 trillion on displays. The company will also pay a dividend of KRW 5,000 a share, or a total KRW 752.2 trillion for the year.
Samsung said its smartphone shipments were up around 30 percent from the previous quarter, led by strong seasonal demand, especially in developed markets such as the EU. The average selling price also improved sequentially. Overall the handset market is estimated to have grown in the mid teens versus Q3. Samsung's LTE network equipment sales also continued to grow, with the expansion of LTE in Korea and North America. For the global market outlook for this year, demand for entry-level smartphones and tablet PCs is expected to increase significantly, while the growth momentum for feature phones is expected static. Emerging markets and the spread of LTE have also contributed to the growth of the smartphone market, which is expected to expand by more than 30 percent. However in Q1, global demand is expected to contract due to a seasonal slowdown, while competition remains intense amid the continued launch of new smartphones. Competition is also expected to increase in tablets as more mass-market models are launched.
Samsung's semiconductor business managed to sustain profitability amid weak market demand, thanks to a mix of high-margin products such as servers and solid state drives and robust demand for NAND chips used in mobile devices such smartphones and tablet PCs. Semiconductors, including memory and system LSI, posted operating profit up 29 percent to KRW 2.31 trillion in the fourth quarter. Revenue reached KRW 9.17 trillion, down 1 percent on the fourth quarter of 2010.
The display panel business recorded an operating loss of KRW 220 billion, compared to a KRW 100 billion profit in the year-earlier period, despite 19 percent revenue grothw to KRW 8.55 trillion on the back of peak seasonal demand. Samsung said it will look to secure growth in 2012 with a differentiated product mix, including tablet, 3D and LED television panels, while strong demand for smartphone display panels forecast to continue.
