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Samsung's Q4 earnings rebounds on chip sales

2015-01-08 11:17 Xinhua Web Editor: Qin Dexing

Samsung Electronics, the world's largest maker of memory chips, smartphones and TVs, saw its fourth- quarter earnings rebound from the prior quarter on brisk chip sales and reduced marking costs, a regulatory filing showed Thursday.

Preliminary figure for Samsung's operating profit was 5.2 trillion won (4.7 billion U.S. dollars) in the three months ending Dec. 31, the company said.

The fourth-quarter profit was down 37.42 percent from a year earlier, but it rebounded from a 4.06 trillion won operating profit in the third quarter.

Samsung's operating profit fell below the 5 trillion-won mark in the third quarter of last year for the first time in 11 quarters, before rebounding above the level in the fourth quarter.

The fourth-quarter figure beat market expectations of about 4.8 trillion won on the back of robust semiconductor sales and reduced marketing costs.

Smartphone sales, on which the company heavily depends for profit, are estimated to slide in the fourth quarter, but sales of high-end products, such as Galaxy Note4, are believed to have boosted profit in the mobile business.

Samsung is struggling amid fiercer competition with rivals, especially Chinese manufacturers equipped with low-end products.

Samsung's global market share in smartphones declined 7.7 percentage points from a year earlier to 24.4 percent in the third quarter.

The combined share of three major Chinese companies, including Xiaomi, Huawei and Lenovo, increased 4.1 percentage points to 15.5 percent.

The fall in the South Korean currency to the U.S. dollar is also believed to have influenced positively the fourth-quarter earnings.

The won/dollar exchange rate rose about 6 percent in the fourth quarter from the prior quarter.

Revenue was 52 trillion won in the fourth quarter, down 12.28 percent from a year earlier. It was up 9.59 percent from the previous quarter.

Samsung's revenue fell below the 50 trillion-won mark in the third quarter for the first time in around two years, but it rose again above the level in the fourth quarter.

The company did not unveil its estimates for net profit and a breakdown of each business. The final results will be announced later this month after an external audit.

For the whole year of 2014, Samsung's revenue was 205.48 trillion won, down 10.15 percent from a year earlier. It was the first time in nine years that the company's annual revenue reduces.

The 2014 operating profit was 24.94 trillion won, down 32.21 percent from a year ago. It marked the first decline in three years.

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