Samsung posts record profit as smartphone sales provide boost

Samsung posts record profit as smartphone sales provide boost

Seoul : South Korea | Jan 24, 2013 at 11:59 PM PST
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A business poll had forecast better operating profits for Samsung than were recently announced

Samsung Electronics announced Friday that its fourth-quarter profits increased by 76 percent to a record high. The company attributed the profit growth to boost in its smartphones sales and chip business’s profit margin.

Although the figure showed a record for Samsung, yet the company’s share price went down by more than 2 percent by mid-day trading in the South Korean capital. Analysts think that this happened because the company forecasted that sales for smartphones will drop in 2013.

"The furious growth spurt seen in the global smartphone market last year is expected to be pacified by intensifying price competition compounded by a slew of new products," said Samsung in a press release, according to CNN. "In the first quarter, demand for smartphones in developed countries is expected to decelerate, while their emerging counterparts will see their markets escalate with the introduction of more affordable smartphones."

Samsung, the world’s largest smartphone maker, reported its net profit at 7.04 trillion won, or $6.6 billion. The figure is up from 4.01 trillion won reported by the company in January 2012.

Even though Samsung Electronics retained its status of being the largest seller of smartphones and cellphones in the quarter, it indicated being influenced by an almost parallel intensity of growth in business as reported in the results of Apple Inc. just a day ago. Figures showed Samsung’s growth momentum faster than Apple’s and market analysts think that it would grow at the same rate for much of 2013 due to a wide assortment of products.

Samsung said in its press release that its top products and profit drivers were the Galaxy smartphones’ assortment and tablets in addition to its chip business division. The company’s mobile phones’ division, which reportedly sells around a quarter of all mobile phones in the world, posted an operating profit of $5.44tn won, up from $2.56tn won a year back.

The company’s profits were also boosted by its displays unit, which posted a profit after losses a year back. Information released by Samsung show that the display unit’s sales boosted from its organic light-emitting diodes (OLED) screen, installed in the Galaxy smartphones.

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Samsung's operating profits have been on the rise since the first three months of 2011
Samsung's operating profits have been on the rise since the first three months of 2011
Kamran Ahmed is based in Seattle, Washington, United States of America, and is an Anchor on Allvoices.
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