Samsung Posts Record Q4 Profits, Annual Sales
Samsung Electronics strengthened its position as the world’s biggest consumer electronics firm with record annual sales for 2011 and record profits for the final quarter of 2011.
In Q4 Samsung’s operating profit soared 73% to 5.2 trillion won ($4.5 billion) beating the 4.6 trillion-won average analyst estimates compiled by Bloomberg. Quarterly sales rose 12% to 47 trillion won, helping to put the annual top line at a record 164.7 trillion won ($142 bil.) though operating profits for the full year slipped 6.7% to 16.2 trillion won ($14 bil.)
The S. Korean giant’s hottest business was its mobile phone unit which set a new record with a record 300 million units and shot past Apple to become the world’s biggest seller of smartphones after shipping 27.8 mil. units in the third quarter. That’s more than three times as many as sold during the same quarter of 2010.
Samsung did even better in the 4th quarter, shipping an estimated 32 million smartphones. Its sales success was powered in part by the Galaxy S II which debuted in May and passed the 10 million unit mark faster than any previous Samsung product.
The company is likely to take the top spot in total phone sales in 2012 by releasing more low-end models after devoting 2011 to taking on Apple’s iPhone with a series of high-end handsets. In fact, Samsung’s success against is US rival — as well as one of its top customers — was based in part on its success in simply being able to put out more models than Apple.
Currently the top spot in terms of total mobile units shipped is Nokia which still retained about 24% of the global market share as of last October. That share has been slipping steadily, however, to Samsung, Apple and HTC. In October of 2010 Nokia had held nearly a 29% global share.
Samsung’s other units haven’t fared as well due to a slowdown in the global PC market. Profits at its chip division fell 11% to 1.6 trillion won ($13.8 bil.) on sales of 9.65 trillion won ($8.32 bil.). The price of Samsung’s benchmark 2-gigabit DRAM memory chip plunged 51% during 2011. However, Samsung’s new focus on smartphone DRAM chips helped it to retain stronger sales than rivals.
Samsung also felt the pinch of a slumping display market, with the average sales price of a flat-screen panel falling 21% from 2010 levels. That caused its annual display profits to plunge 93.5% from the 100 billion won ($86.2 mil.) posted in 2010 though sales rose slightly to 7.95 trillion won ($6.85 bil.) from 7.2 trillion won ($6.21 bil.).
But Samsung’s global position in the LCD market has become stronger, having boutht out Sony’s stake in their joint LCD venture for 1.08 trillion won ($931 mil.) in December, with Sony foreseeing an eighth straight year of losses from TV sales.
Global LCD TV shipments for 2011 are estimated at 206 million units, short of the 211 million units projected. Samsung’s TV unit saw a profit of about 170.5 billion won ($147 mil.), a big improvement over a loss of almost exactly the same amount in 2010. Samsung has enjoyed success from its aggressive introduction of 3-D and web-based features, helping meet its sales target of 45 mil. sets and boosting sales to 16.1 trillion won ($13.9 bil.) from 15.97 trillion won ($13.77 bil.) in a stagnant market.