Seoul, South Korea -- Samsung
Electronics Co., Ltd. today announced revenues of 47.3 trillion Korean
won on a consolidated basis for the fourth quarter ended December 31,
2011, a 13-percent increase year-on-year. For the quarter, the company
posted consolidated operating profit of 5.3 trillion won, representing a
79-percent increase year-on-year. Consolidated net profit for the
quarter was 4 trillion won.
In its earnings guidance
disclosed on January 6, Samsung estimated fourth-quarter consolidated
revenues would reach approximately 47 trillion won with consolidated
operating profit of approximately 5.2 trillion won.
The fourth
quarter results brought Samsung's full year 2011 revenue to an all-time
high of 165 trillion won, up 7 percent from the previous year. Net
income registered 13.73 trillion won, down 15 percent compared with
2010, while operating profit was 16.25 trillion won, a 6-percent on-year
decline.
Highlighting the quarterly performance, the
Telecommunications businesses reached record quarterly earnings of 17.82
trillion won, up 52 percent from the previous year, with growth mainly
driven by strong sales of Samsung's GALAXY S II and GALAXY Note.
Operating profit for the businesses also hit a record 2.64 trillion won
on-quarter.
"Despite intensified competition amid the global
economic slowdown, our Telecommunications businesses continued to post
solid earnings with an enhanced line-up of high-end smartphones,
resulting in higher average selling price (ASP). Moreover, improved
profitability and earnings growth of our Set businesses, including
smartphones and flat panel TVs led to our company's strong earnings,"
said Robert Yi, Senior Vice President and Head of Investor Relations.
Yi also attributed the solid performance to Samsung's differentiated
technology, cost competitiveness, targeted marketing activities and
supply chain management (SCM) capabilities throughout all business
units.
Samsung's reinforced lineup of LED TVs, including premium
models for advanced markets and region-specific models for emerging
markets, has also improved quarter-on-quarter sales.
On the
components business side, the Semiconductor Business saw demand for PC
DRAM remain weak but growth of specialty products such as server and
mobile DRAM was constant due to the rising demand for smartphones and
tablet PCs. Although profitability for memory chips and LCD declined,
rapid growth in system LSI and OLED panels was a promising signal for
future growth.
Capex to Reach 25 Trillion Won in 2012
In
2012, capital expenditure is forecast to amount to 25 trillion won, in
which 15 trillion won will be invested in the Semiconductor Business
that consists of memory and system LSI. Of the total Capex planned for
this year, 6.6 trillion won will be allocated for investment in the
Display Panel (DP) segment, which encompasses LCD Business and
subsidiary Samsung Mobile Display.
Last year, Samsung executed a
total of 23 trillion won in investments, including 13 trillion won for
Semiconductor Business and 6.4 trillion won for the DP segment. Capex
for the fourth quarter was around 5.9 trillion won.
NAND Demand Strong Amid Mobile Market Growth
Samsung's
Semiconductor Business - including Memory and System LSI - posted
consolidated operating profits of 2.31 trillion won in the fourth
quarter. Revenue reached 9.17 trillion won, a 1-percent decrease
year-on-year. For the full year 2011, the chip unit registered 7.34
trillion won in operating profits on revenue of 36.99 trillion won.
The Semiconductor Business sustained profitability in the quarter, amid
weak market demand, thanks to a mix of high-margin products such as
servers and Solid State Drives (SSDs) and robust demand for NAND chips
used in mobile devices such smartphones and tablet PCs.
Looking ahead, demand for PC DRAM is expected to remain sluggish in the
first quarter due to static global market trends compounded by a recent
disruption in the supply of hard disk drives. Demand for NAND flash
chips is expected to remain solid with the release of new mobile devices
to market, while system LSI will see profits slip in the first quarter,
due to off-season market conditions.
For the year, Samsung plans to secure price competitiveness in the
market through differentiated mobile and server DRAM products by
expanding 30nm-class and below processes. In the case of NAND, the
company will focus on securing profitability by consistently expanding
20nm-class processes. Investment in system LSI will be expanded to
proactively respond to the rising demand for application processors and
image sensors.
Shipments of Value-Adding Panels Rise
The Display Panel Business
recorded an operating loss of 0.22 trillion won on revenue of 8.55
trillion won in the fourth quarter and a sales increase of 19 percent
from a year ago on the back of peak seasonal demand.
For fiscal
year 2011, the Display Panel Business posted a 0.75 trillion won
operating loss while posting 29.24 trillion won in revenue.
Despite
concerns over a slowdown in sales and a sluggish European economy,
demand remained steady during the traditionally high end-of-year season,
including ‘Black Friday' sales in North America, helping the TV panel
market to post a 5-percent on-quarter increase. However, IT panel demand
was negatively impacted due to the flooding in Thailand, declining
on-quarter.
On the back of value-adding products such as LED and
3D TVS, Samsung outpaced market growth by achieving a more than 20
percent increase in TV panel shipments compared to the previous quarter.
Looking
ahead, weak seasonality is expected to dampen demand in the first
quarter, while demand in 2012 is likely to remain stagnant on concerns
over the global economy and oversupply. Samsung 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 is forecast to continue.
Smartphone Sales Remain Main
Driver
The Telecommunications businesses - including mobile communications and
telecommunication systems - posted a record quarterly operating profit
of 2.64 trillion won for the period. Fourth quarter revenue reached a
record 17.82 trillion won compared with 11.75 trillion won for the same
period of 2010.
The stellar performance has allowed Samsung to
register full year 2011 operating profit of 8.27 trillion won, up 90
percent on-year. Total sales for fiscal year 2011 also hit an all-time
yearly high of 55.53 trillion won, accounting for almost one-third of
Samsung Electronics' total revenue for the year.
Samsung's
flagship GALAXY S II smartphone and its full lineup of high-end mobile
devices, such as the GALAXY Note and the GALAXY Nexus, and entry-level
models drove up revenue for the year by almost 40 percent compared with
the previous year.
All told, shipments of Samsung smartphones rose
by approximately 30 percent in the fourth quarter, compared with the
previous quarter.
For the global market outlook for this year,
demand for entry-level smartphones and tablet PCs will increase
significantly, while the growth momentum for feature phones is expected
to stay static. Emerging markets and the spread of LTE (Long-Term
Evolution) wireless telecommunications technology have also contributed
to the growth of the smartphone market, which is expected to grow by
more than 30 percent.
The Telecommunication System Business will
further solidify its leadership in the wireless network market with the
expansion of the LTE service in Korea and North America.
Demand for LED TV to Continue
Samsung's
Digital Media & Appliances businesses, which encompass Visual
Display, Digital Appliances, IT Solutions, and Digital Imaging, posted
quarterly revenues of 16.96 trillion won for the October to December
period, up 4 percent year-on-year. The businesses registered an
operating profit of 0.57 trillion won in the fourth quarter.
For
the full year 2011, the Digital Media businesses' combined revenue
totaled 58.92 trillion, with operating profit up 229 percent on-year to
1.41 trillion won.
Sales of LED TVs grew strongly during
the fourth quarter on traditionally high seasonal demand, achieving 40
percent growth on-quarter. Against this, Samsung outperformed the market
by focusing on sales of premium models, shipping over 55 percent more
LED TVs compared to the previous quarter.
In 2012, weak
seasonality in the first quarter will see an on-quarter decrease in
demand although overall market growth is expected for the year, driven
by strong growth momentum in emerging markets. In developed markets,
Samsung will leverage its premium LED television offerings to lift sales
as LED TV sales rise to account for more than 60 percent of the global
flat panel TV market in 2012.
For the Digital Appliances market,
although the global economic slowdown caused demand to contract for the
quarter, Samsung achieved quarter-on-quarter sales growth in developed
markets such as the U.S. and Europe. Looking ahead, low growth is
expected in developed markets and increasing demand in emerging markets
to slow. Samsung expects its diversified product mix, as well as
increased operational efficiency, to enhance profitability.
[Source: Samsung]