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Samsung tips record Q4 profit

Jan 06 2012 08:39

Seoul - Samsung Electronics said on Friday it expects a record operating profit in the fourth quarter of 5.2 trillion won ($4.5bn), up 73% year-on-year thanks mainly to strong smartphone sales.

The South Korean firm, the world's largest maker of flat panels, memory chips, flat screen televisions and smartphones, was publishing its earnings guidance before official results expected later this month.

It estimated sales of 47 trillion won in October-December, a 12% rise from a year earlier.

For the full year in 2011, Samsung said it expects operating profit of 16.2 trillion won on record sales of 164.7 trillion, up 6.5% from the previous year.

The company gave no details in its earnings guidance and did not predict net profit. It said estimates may differ from the results because it has not completed an audit.

Analysts cited by Dow Jones Newswires said the company benefited from better sales of cellphones and high end televisions in the fourth quarter, despite falling prices for chips and flat panels.

They said the recent sealing of a deal to sell Samsung's hard disk drive business to Seagate Technology for $1.4bn in cash and shares also boosted overall income.

In the third quarter, the company achieved an operating profit of 4.25 trillion won on sales of 41.27 trillion.

Samsung overtook US rival Apple in the third quarter to become the world's largest seller of smartphones. It sold 27.8 million smartphones during the quarter compared to Apple's 17.1 million, according to market researcher Strategy Analytics.

The two firms have been waging a global battle over smartphone and tablet patents, with around 30 lawsuits in 10 countries since April last year. But Friday's figures suggested the legal tussle had not significantly affected the Korean firm's sales.

"Samsung's fourth-quarter smartphone shipments are estimated at around 35 million units, which means it will continue to keep its top spot," said Lee Ka-Keun, an analyst at Hana Daetoo Securities.

Despite the uncertain global economic outlook, analysts expect Samsung to achieve record sales this year.

They said synergies between its mobile devices and its component businesses would boost growth in sales of mobile processing chips and ultra-thin flat displays.

Samsung Electronics, the world's largest technology company by revenue, employs some 190 500 people in 206 offices across 68 countries.

Its chairperson Lee Kun-Hee, in a New Year speech to employees on Monday, said the firm would focus this year on developing new products and tapping into new businesses to stay ahead of competitors amid the global slowdown.

"Samsung's future lies in new businesses, new products and new technologies," he said, stressing the need for "increasing investment and jobs and focusing on exports".

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