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Samsung expects to post W200tr in sales

Smartphone sales appear to have spearheaded the stellar performance

Samsung Electronics is expected to post up to 200 trillion won in annual sales based on a record-breaking year in 2012, the company said in a statement Tuesday.

Last year, the company estimates that it recorded 201 trillion won of sales, while operating profit reached 29 trillion won.

This was because in the fourth quarter, Samsung Electronics is seen to have posted sales of 56 trillion won and an operating profit of 8.8 trillion won. This indicates that sales rose by more than 7 percent compared to the third quarter, while operating profit rose more than 9 percent.

In quarterly estimates, both the sales and operating profit were the highest so far. 
Samsung senior vice president Michael Abary introduces the Series 7 Chronos during a news conference at the Consumer Electronics Show in Las Vegas on Monday. (AP-Yonhap News)
Samsung senior vice president Michael Abary introduces the Series 7 Chronos during a news conference at the Consumer Electronics Show in Las Vegas on Monday. (AP-Yonhap News)

Analysts had previously been upbeat about Samsung’s fourth-quarter performance, with many predicting more than 7.5 trillion won in profit.

Smartphone sales were the driving force behind the stellar performance, they said.

“The solid performance was driven by the smartphone sales, and we should pay attention to how much it’s contributing to the company’s overall performance,” said Song Jong-ho, an analyst for KDB Daewoo Securities said.

Last year, Samsung became the world’s largest manufacturer of mobile phones in terms of sales. In total, it is estimated to have sold up to 400 million handsets. Among them, around half were smartphones. Apple Inc., on the other hand, is expected to have sold about a quarter of Samsung’s annual figure, experts said.

“Our estimates show that Samsung Electronics shipped over 110 million handsets for the fourth quarter,” said Song Myong-sub, researcher at HI Investment Securities.

Up to the third quarter of last year, Samsung Electronics had recorded sales of 145 trillion won.

With the fourth quarter feat, the company will now become the country’s first company to post annual sales of 200 trillion won.

What was more meaningful, analysts said, was that Samsung managed to increase its sales by up to three times the figure in 2008, when the global financial crisis struck. This means the record-high sales were achieved in just a five year span of time, they added.

The firm’s operating profit failed to reach 30 trillion won, but the near 9 trillion won was highly commendable, industry watchers said.

The company will be announcing its official fourth quarter figures later this month. Apple is set to make its announcement on its October-December performance on Jan. 23.

In the first quarter of this year, Samsung Electronics may suffer a dent in its profit, experts predicted, due to having to set aside reserves to pay out to Apple over the patent lawsuit the two are entangled in.

In a previous trial, Samsung was ordered to pay $1.05 billion to Apple for infringing its design. Samsung has appealed and another trial is ongoing to settle the dispute.

By Kim Ji-hyun (jemmie@heraldcorp.com)
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