Seoul, South Korea – Samsung Electronics reported a 7
percent increase in revenues and a 13 percent increase in net income for the
fourth quarter, ended Dec. 31, 2010.
Samsung had revenues of 41.87
trillion Korean won on a consolidated basis for the fourth quarter and net income
of 3.42 trillion won, a 13 percent increase year on year.
results brought Samsung’s full-year 2010 revenue to an all-time high of 154.63
trillion won, up 13 percent from last year. Net income reached a record high of
16.15 trillion won, up 65 percent compared with the previous year, while
operating profit was 17.30 trillion won, also a record.
performance in the fourth quarter continued to be driven by memory
semiconductors and strong sales of its cutting-edge smartphones. On a
quarter-on-quarter basis, however, profit margins decreased primarily due to
weakening pricing for memory semiconductors and LCD panels, as well as price
competition in the TV market.
difficult business environment, including reduced IT demand caused by the
economic slowdown, we achieved record-high results both in terms of sales and
operating profit in 2010,” said Robert Yi, VP and head of Samsung Electronics’
investor relations team. “However, considering overall business conditions, unlike
2010, we expect the traditional earnings pattern of a weak first half, with a
strong second half to return in 2011.”
price competition to intensify in the consumer electronics, IT and mobile
device markets in 2011, while major components prices are also forecast to
decline. To offset pressures stemming from adverse market conditions, Samsung
will focus on the cost competitiveness of its memory semiconductor portfolio,
reducing marketing expenses and increasing shipments of high-end smartphones
and tablet devices.
The LCD business
recorded an operating profit of 0.10 trillion won on revenue of 7.20 trillion
won in the fourth-quarter, down 1 percent from a year ago as increasing
shipments could not offset price falls. For fiscal year 2010, Samsung’s LCD business
posted 1.99 trillion won in operating profit with 29.92 trillion won in
Overall unit sales
for the period increased more than 10 percent quarter on quarter. While
shipments for IT panels climbed supported by demand for tablet PCs, the fall in
demand for TV panels was compounded by a buildup of inventory in the TV-set
market, the company said.
sales prices retreated across all segments in the fourth quarter. The average
price for TV panels dropped 12 percent, with prices for monitor panels dipping
5 percent and notebook PC panels falling 3 percent.
LCD panel prices will remain low in the first quarter of 2011 due to supply
outpacing demand. However, the company anticipated incremental demand increases
in the second half led by the economic recovery and inventory restocking by set
makers. Samsung aims to drive market growth with a new lineup of entry-level
LED panels and explore the high-potential market for tablet PC panels.
telecommunications businesses — mobile communications and telecommunications
systems — registered a record quarterly operating profit of 1.44 trillion won
for the period, up 38 percent year on year. Fourth-quarter revenue reached
12.11 trillion won, compared with 10.17 trillion won for same period of 2009.
By finishing the year strongly, Samsung achieved full-year 2010 operating
profit of 4.3 trillion won on sales of 41.2 trillion won for its
Driven by strong
year-end demand for the company’s flagship smartphones, Samsung’s mobile device
sales reached 80.7 million units for the quarter, up 17 percent year on year.
This brought total sales for the year to 280 million units, registering growth
of 23 percent and outperforming the overall market, Samsung reported
introduction in June, Samsung’s flagship Galaxy S smartphone has achieved
worldwide sales of 10 million units, while the Galaxy Tab — an Android-powered
tablet device — attracted strong year-end demand. In emerging markets,
Samsung’s diverse product mix of mass-market smartphones and touchscreen
feature phones also registered solid sales growth.
While mobile device
sales are expected to contract slightly in the first quarter of 2011 due to
weak seasonal demand, Samsung forecast high single-digit sales growth for the
year overall, driven by the fast-expanding smartphone and tablet segments.
Samsung announced it will introduce the successor to its Galaxy S smartphone
during the first half of 2011, featuring a dual-core processor and Super AMOLED
Plus display to further enrich user experience. With its growing lineup, the
company is targeting smartphone sales of 60 million units for the year, double
that of 2010. In the tablet market, Samsung will complement its Galaxy Tab with
a range of devices to optimally meet various user needs, the company said.
Samsung’s digital media
businesses, which encompass visual display, digital appliances, IT solutions
and digital imaging, posted quarterly revenues of 15.97 trillion won for the
October to December period, up 3 percent year on year. The businesses
registered a loss of 0.17 trillion won despite improved performance in TV and
IT products. For the full year 2010, the digital media businesses’ combined
revenue totaled 57.26 trillion, up 12 percent from 2009, with an operating
profit of 0.49 trillion won.
12.72 million flat panel TVs in the fourth quarter, a 40 percent jump compared
with the previous quarter and a 17 percent on-year increase. LED TVs sales grew
strongly during the fourth quarter as consumers in developed markets continued
to adopt this new technology. Market demand for LED TVs is forecast to rise
further, with the portion of LED models in the overall LCD segment expected to
reach 51 percent this year.
In 2011, market
demand for flat-panel TVs is forecast to increase 11 percent, helped by strong
emerging market sales. To enhance profitability, Samsung aims to increase sales
of premium products such as LED, 3D and smart TVs. It will also market
region-specific models along with low-cost models in emerging markets.