Samsung logs record sales, 4-year-high operating profit in Q4

Seoul: Samsung reported strong fourth-quarter earnings on robust chip business and brisk sales of consumer electronics.

Net profit rose 64.04 per cent from a year earlier to 10.8 trillion won ($9 billion) in the October-December period, the world’s largest memory chip and smartphone vendor said in a regulatory filing.

Operating profit jumped 53.3 per cent to 13.8 trillion won, the highest fourth-quarter operating profit since 2017.

Sales hit a quarterly record of 76.5 trillion won, up from 61.5 trillion won from a year earlier, on the back of strong finished product businesses with expanded sales of premium smartphones.

On a quarterly basis, Samsung’s operating profit was down 12.3 per cent from the third quarter due to one-off costs, including employee bonuses. Sales were up 3.5 per cent.

Samsung said its mainstay chip business posted quarterly sales of 26 trillion won and an operating profit of 8.84 trillion won.

While demand for memory chips used in servers was strong, earnings declined from the previous quarter because of the continued global supply chain issue and a slight drop in average selling prices, it said.

The chip contract manufacturing, or foundry, business logged record-high revenue, it said, without providing detailed figures. Its profitability, however, decreased a bit from the third quarter “due to a rise in costs related to ramping up advanced process nodes,” it added.

The component shortage appears to have also eased in the fourth quarter, contributing to bigger smartphone shipments estimated to be around 67 million in the October-December period, up around 7 per cent from a year earlier, according to Counterpoint Research.

The total sales of the Galaxy Z series is believed to be around 8-9 nine million units last year, led by the popularity of the Galaxy Z Fold3, which folds in half like a book, and the clamshell-type Galaxy Z Flip3 among young tech-savvy consumers. Both models were released in August last year, reports Yonhap news agency.

Samsung’s Mobile eXperience (MX) and networks unit reported 28.95 trillion won in sales and 2.66 trillion won in operating profit.

Meanwhile, Samsung’s capital expenditures hit 48.2 trillion won in total last year, including 43.6 trillion won for semiconductors.

The spending focused on expanding capacity and process migrations at its chip fabrication plants in Pyeongtaek, about 70 kilometers south of Seoul, and Xi’an in China to pump up demand for advanced nodes, it said.

For the full year, the company’s chip business reported more than 94 trillion won in revenue, surpassing Intel by sales.

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