Samsung Electronics Co., the world's largest maker of memory chips and smartphones, estimated on Friday that it had posted a record operating profit in the fourth quarter on the back of strong sales of smartphones.
Operating profit estimated for the October-December period reached 5.2 trillion won (US$4.51 billion), up 72.8 percent from a year earlier, Samsung Electronics said in a regulatory filing.
The preliminary estimate beat a market consensus of 4.81 trillion won surveyed by Yonhap Infomax, the financial news arm of Yonhap News Agency. For 2011, operating profit is estimated to have hit 16.2 trillion won.
Its fourth-quarter sales rose 12.3 percent on-year to a record 47 trillion won, said the company, which did not provide net profit figures. For the whole of 2011, revenues were estimated at a record 164.7 trillion won, up 6.5 percent from the previous year.
Samsung Electronics plans to unveil its fourth-quarter earnings later this month.
Market watchers said that forecast-beating results mainly stemmed from brisk sales of its smartphones and one-off gains, adding that the trend of robust earnings is likely to continue into the first quarter.
"A slowing global economy and the eurozone debt crisis will be the main risk factors for Samsung Electronics this year. But the company is likely to post good earnings in the first quarter as sales of smartphones and other high-end mobile products are expected to remain strong at least until the first half," said John Park, an analyst at Daishin Securities.
"Key memory chip prices, which were hit hard by last year's flooding in Thailand, are also forecast to gain ground, helping Samsung's chip division recover."
Shipments of semiconductors slumped last year due to a decline in prices of dynamic random access memory (DRAM) chips.
A fall in prices of DRAM chips, mainly used in personal computers, had squeezed Samsung Electronics' earnings, but brisk sales of smartphones, mobile chips and display panels for mobile phones offset its weak profits from its memory chip business, according to analysts.
Samsung overtook Apple Inc. in the third quarter to become the world's largest maker of smartphones for the first time. The two companies have been waging a global patent battle in around 30 lawsuits in 10 countries since April last year.
Samsung probably sold an estimated 37 million units of smartphones in the fourth quarter, up 28 percent from three months earlier, according to Kiwoom Securities.
One-time profits worth 800 billion won were also reflected in the fourth-quarter profit, including some 500 billion won gains from the sale of its money-losing hard drive disk (HDD) unit, according to analysts. Samsung sold its HDD business to Seagate Technology Plc. for US$1.38 billion.
Analysts said that the company is expected to log solid earnings for this year as smartphone shipments are likely to remain firm, aided by a diverse product lineup. A possible rebound in DRAM prices is also likely to bolster its earnings, they added.
