Samsung to hold capex at 2012 level


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: Security forces have arrested a Syrian man accused of plotting attacks and his Filipino accomplice in a raid on an illegal explosives factory in Riyadh, the Interior Ministry said, according to SPA.The Saudi Press Agency reported Saturday tha...
JEDDAH: Cyber security experts and researchers have confirmed that they have received many requests for help in dealing with extortion and blackmail.The cases were so serious that some of the young men had tried to commit suicide.Mohammed Al-Sariei,...
JEDDAH: For many sanitary workers, the Islamic greeting has become a way to tug at people’s hearts. The greeting is made in hopes of receiving a couple of riyals in exchange for cleaning the streets.Standing at traffic lights with their brooms, their...
JEDDAH: The streets of Mina are still unclean and littered with trash despite the fact that it has been seven days since the pilgrims departed.The Makkah municipality has warned pilgrim establishments not to dump their waste and has threatened them w...
JEDDAH: Camel owners are accusing “hidden hands” behind the campaign against camels, which has led to the deterioration of the animal market and deeply impacted their prices, alleging that government agencies are mainly supporting these parties.Owner...
JEDDAH: The Ministry of Labor created 1.5 million jobs for young Saudi men and women in 2014, a six percent rise from the previous year.This is according to Labor Minister Mofarrej Al-Haqbani, who said the ministry has been working on several measure...
DAMMAM: The Dammam chapter of the Indian Engineers Forum (IEF) recently celebrated 48th Annual Engineers Day.“The say is celebrated every year in India as Engineer’s Day to commemorate the birthday of the legendary engineer, Sir Mokshagundam Visvesva...
DAMMAM: Rumors are nearly as old as human history, but with the rise of the Internet, they have become ubiquitous. False rumors are especially troublesome; they impose real damage on individuals and institutions, and they are often used by enemies to...
RIYADH: The Education Ministry organized the National Unity Forum under the sponsorship of Jazan Gov. Prince Mohammed bin Nasser.“The forum engendered loyalty to the Kingdom and the Saudi leadership among the employees of the ministry,” Education Min...
JEDDAH: The bodies of the Mina stampede are being buried in separate graves after giving a bath and offering funeral prayers, the National Society for Human Rights (NSHR) of Makkah has said.“The bodies are not being buried in mass graves. They are be...
RIYADH: King Saud Medical City (KSMC) launched a campaign recently to thank the country’s security officers for keeping the country safe. “The campaign was launched as a way to express our gratitude to all the security officers who are serving the na...
RIYADH: The traffic department in the capital launched a campaign against badly maintained automobiles as part of its drive to limit accidents and control pollution, and seized 1,915 vehicles.The department said that 1,015 vehicles were seized for no...
AL-AHSA: The beautiful terrain and historical caves at the Al-Qara Mountain in Al-Ahsa beckoned citizens as well as expatriates during the Eid Al-Adha holidays.The mountain and its surroundings, including the oasis of palms, turned into a beehive of...
JEDDAH: The Foreign Ministers of Organization of Islamic Cooperation (OIC) member states recently condemned Israeli violations in Palestinian territories, calling the actions a violation of international law.The ministers passed a resolution confirmi...
RIYADH: Several subscribers of Saudi Electricity Company (SEC) in the northern part of the Saudi capital have complained that the company’s services went down for more than 11 hours earlier this week.An online publication reported that the services w...

Stay Connected