Samsung to hold capex at 2012 level



ASSOCIATED PRESS

Published — Saturday 26 January 2013

Last update 26 January 2013 12:25 am

| نسخة PDF Print News | A A

SEOUL: Samsung Electronics Co. said quarterly profit soared 76 percent, boosted by the popularity of its Galaxy smartphones, which outsold the iPhone for a fourth straight quarter.
But the company said it expects earnings to decline during the current quarter because of seasonally low demand for consumer electronics.
It is also leaving its 2013 capital expenditure at the same level as last year at 23 trillion won ($ 21.5 billion), underlining uncertainty about the global economy and declining demand for personal computers.
The strong South Korean won is also becoming a negative for Samsung.
It expects more than 3 trillion won will be shaved from its 2013 operating profit due to the stronger local currency.
Net profit for the final quarter of 2012 totaled 7.04 trillion won ($ 6.6 billion), a 76 percent surge from 4.01 trillion won a year earlier. Analysts had expected 6.95 trillion won in net profit, according to financial information provider FactSet. Sales rose 19 percent over a year earlier to 56.06 trillion won and operating income jumped 89 percent to 8.84 trillion won.
Increased sales of smartphones were the key source of its profit growth.
Samsung, which overtook Apple Inc. as the top smartphone maker last year, said its operating profit from the division that makes and sells smartphones and tablets more than doubled to 5.44 trillion won in the fourth quarter, from 2.56 trillion won a year earlier.
Most analysts believe the Suwon, South Korea-based Samsung shipped more than 60 million smartphones, including the Galaxy S III and Galaxy Note II, during the three months ending in December, which would put the year’s smartphone sales at more than 200 million. Apple said it sold 47.8 million iPhones in the quarter.

Hong Kong-based research firm Counterpoint Research said Samsung took 33 percent market share in the fourth quarter, compared with Apple’s 21 percent.
Another market researcher IDC put Samsung’s share at 29 percent versus Apple’s 22 percent.
The company’s component divisions that make semiconductor products and display panels also benefited from a rise in demand for smartphones.
Sales of mobile processors that power popular devices such as Apple’s iPhones and Samsung’s own Galaxy smartphones boosted the bottom line.
The recovery in the display panel division was also led by strong sales of advanced mobile-phone screens called OLED, which are mostly found in high-end Samsung smartphones.
The display division posted 1.11 trillion won in profit compared with a small loss a year earlier.
Analysts said Samsung will likely see a continued rise in smartphone sales this year, especially in low- and mid-priced models where it doesn’t face competition from Apple.
Some analysts, including Young Park at Woori Securities, forecast Samsung smartphone shipments to rise as much as 50 percent this year from 2012 to over 300 million units.
Samsung executives said during the conference call with investors that smartphone demand will ease in the current quarter without giving guidance for the company’s performance.
But analysts said that Samsung could be little affected by market demand thanks to its variety of products that range from affordable to expensive devices.
“Even though they said demand for smartphone will slow down in the first quarter, Samsung will likely buck the industry trend and its own smartphone sales will go up,” said Byun Han-joon, an analyst at KB Investment & Securities.
Apple, which keeps its iPhone price high, might see iPhone sales plateau in coming years as more consumers snap up cheaper Android phones.
Still, Apple’s business has been more profitable because of the high price of the iPhone, which generates a larger profit per sales.
Samsung, which makes dozens of handset models a year and customizes them for mobile operators, also sells cheaper smartphones and spends about three times more on expenses such as marketing and advertising costs to promote its Galaxy brand phones and televisions.
Counterpoint Research estimates Apple, though it sold fewer handsets than Samsung, took 70 percent of profit in the handset market during the fourth quarter, while the South Korean rival claimed 25 percent.
Samsung is expected to introduce a new flagship smartphone in its Galaxy S series as early as April, which analysts say will shore up its bottom line.
The company said consumers seeking to replace its current handset and get a faster wireless connection through LTE networks will drive the demand for new models, easing concerns that sales would slow because of high rates of smartphone use in developed markets.
Part of its strategy to command higher prices from consumers has been adding new hardware features, such as a digital pen in the Galaxy Note series.
Samsung’s flexible display technology, which allows tablet computers to fold into mobile phones or bend the edge of the screen, is an effort to make its products stand out from others and to shore up its profit.
But such technology, which was shown in public earlier this month in Las Vegas, will still need more time for mass production.
Samsung said its profit will be hurt by unfavorable foreign exchange rates this year.
Robert Yi, head of Samsung’s investor relations, said the negative impact from the foreign exchange rates will exceed 3 trillion won ($ 2.8 billion), with the loss largely coming from the firm’s exposure to the euro.

What's happening around Saudi Arabia

RIYADH: Some good news for less fortunate women in society. According to a survey, 77. 3 percent of young men are willing to marry divorced women, 67. 2 percent are ready to tie the knot with widows, while 74. 6 percent of them have no problem marryi...
RIYADH: Iranian Haj and Umrah pilgrims are welcome to enter the Kingdom and would receive all hospitality and courtesy afforded to Muslims from other countries, said Foreign Minister Adel Al-Jubeir here Thursday.He reiterated that the Kingdom’s decis...
RIYADH: A 78-year-old Saudi man has been infected with Middle East Respiratory Syndrome coronavirus (MERS-CoV) by a camel in Taif, according to a senior official in the Ministry of Health.“This is a sporadic case that happens due to humans' interacti...
RIYADH: A medical team at a hospital in Sakaka successfully conducted the first laparoscopic procedure of its kind in the region by using this modern technique.The medical team, headed by Dr. Sami Al-Asari at the King Abdul Aziz Specialist Hospital,...
DAMMAM: A study by the National Family Safety Program with 18,000 teenagers has revealed that 13 percent have been sexually abused, 53 percent neglected, and 80 percent faced various forms of physical and psychological abuse.The study also showed the...
AL-AHSA: The Saudi Commission for Tourism and National Heritage (SCTNH) has signed an agreement with the Ministry of Islamic Affairs to revamp, protect and document 900 ancient mosques in the Kingdom.Representatives from the SCTNH and the ministry he...
JEDDAH: Military items including uniforms, fabrics, belts and hats accounted for 19 percent of customs seizures during 2013 and 2014, with about 8,620 pieces seized in 98 operations at various border crossings.The spokesman for Saudi Customs, Issa Al...
RIYADH: Dr. Hazzaa Al-Zahrani, director of hematology and fellowship training programs at King Faisal Specialist Hospital and Research Center in Riyadh, has warned against the increasing risk of hemophilia in the Gulf region.He said about 75 percent...
RIYADH: The Ministry of Health has asked its various departments to review current inventories to ensure the availability of medicine and medical devices.The move was made after Health Minister Khalid Al-Falih ordered the reduction of medicines and m...
JEDDAH: A local charity has raised SR2 million to help pay for treatment needed by disadvantaged people in the country.The Charitable Health Society For Patient Care (Enayah), which ran its fund raising campaign under the slogan “Ensure my Treatment,...
JEDDAH: Prince Sultan bin Salman, president of the Saudi Commission for Tourism and National Heritage (SCTNH), has announced plans to develop the Kingdom’s islands in the Red Sea and Arabian Gulf into tourist destinations.This would be done after the...
RIYADH: Sri Lankan Ambassador Azim Thassim told his countrymen in the Kingdom that his mission has chalked out a 20/20 plan to promote bilateral relations with the Kingdom and to work for the welfare of the island’s 500,000 workers in Saudi Arabia.Th...
JEDDAH: The Special Criminal Court has sentenced a Saudi man to four years in prison for defying the country’s ruler and traveling to fight in Syria.The court found he had received weapons training and posted tweets about his experiences. He was also...
JEDDAH: Saudi Arabia is ready to join any ground operation against Daesh in Syria if required by the US-led coalition, said Brig. Gen. Ahmed Al-Assiri, spokesman for the Saudi-led coalition in Yemen, on Thursday.“The Kingdom is ready to participate i...
RIYADH: The World Bank and the Saudi Commission for Tourism and National Heritage (SCTNH) are working in close cooperation to promote investments for the rehabilitation of historic city centers in the Kingdom, an SCTNH spokesman said on Wednesday.In...

Stay Connected

Facebook