South Korean conglomerate Samsung Electronics Co. Ltd. (SSNLF.PK, SSNNF.PK) said late Monday that it expects to report record operating profit and sales numbers for the fourth quarter amid continued strong demand for its smartphones and mobile phone flat screens. Quarterly sales are expected to increase more than 18 percent year-over-year.
Samsung is set to hit a new record in operating profit for the fifth consecutive quarter, and its quarterly sales have breached the 50 trillion won mark for the second successive quarter. The company is scheduled to report financial results for the fourth quarter on January 25.
According to a regulatory filing, Suwon-based Samsung estimates operating profit for the fourth quarter to be a record 8.80 trillion won or about $8.3 billion, currently in line with analysts' expectations.
The forecast is 88.8 percent higher than the company's year-ago quarter operating profit of 4.66 trillion won, and represents 9.2 percent growth from third-quarter operating profit of 8.06 trillion won.
This will be the highest ever quarterly operating profit reported by the company. Samsung's mobile business is said to have accounted for nearly 65 percent of the operating profit.
However, operating margin for the business has reportedly contracted marginally amid higher marketing expenses and heated competition during the year-end holiday shopping season. Samsung is said to have sold nearly 500 handsets every minute.
The company also projected sales for the quarter to be 56 trillion won, an increase of 18.4 percent from the prior-year quarter's sales of 47.30 trillion won, just below Street estimates of 56.7 trillion won. Total sales is seen to grow 7.3 percent from the previous quarter's sales of 52.18 trillion won.
Shipments of Samsung's flagship Galaxy S III is said to have slipped in the fourth quarter, but the Galaxy Note II phablet shipments have made up for the loss there. The Note II phablet is a hybrid of a mini tablet and smartphone equipped with a pen and a larger screen than the S III.
Looking further ahead, Samsung is expected to continue its strong lead in smartphone shipments with the anticipated launch of Galaxy IV in the second quarter. However, profits are expected to decline sequentially in the first quarter on weak seasonal demand as well as the lack of any new model launches and the drop in current model prices.
The launch of new smartphones running on Microsoft Corp.'s (MSFT) new Windows operating system is also estimated to boost Samsung's semiconductor business with higher sales of mobile chips.
Samsung shares fell 17,000 won or 1.12 percent in Tuesday's regular trading and is currently trading at 1,503,000 won on the Kospi on a volume of 0.10 million shares.
by RTT Staff Writer
For comments and feedback: email@example.com