- Achieves full year net income of 13.73 trillion won on
sales of 165 trillion won
- 4Q consolidated revenues reach 47.3 trillion won,
operating profit of 5.3 trillion won
SEOUL, Korea - January 27, 2012 - 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.
About Samsung Electronics Co., Ltd.
Samsung Electronics Co., Ltd. is a global leader in
semiconductor, telecommunication, digital media and digital
convergence technologies with 2010 consolidated sales of
US$135.8 billion. Employing approximately 190,500 people in
206 offices across 68 countries, the company operates two
separate organizations to coordinate its nine independent
business units: Digital Media & Communications, comprising
Visual Display, Mobile Communications, Telecommunication
Systems, Digital Appliances, IT Solutions, and Digital
Imaging; and Device Solutions, consisting of Memory, System
LSI and LCD. Recognized for its industry-leading
performance across a range of economic, environmental and
social criteria, Samsung Electronics was named the world's
most sustainable technology company in the 2011 Dow Jones
Sustainability Index. For more information, please visit
www.samsung.com.
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