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(2nd LD) Samsung puts Q4 operating profit at 8.3 tln won

2014/01/07 09:48

By Kang Yoon-seung

SEOUL, Jan. 7 (Yonhap) -- Samsung Electronics Co., the world's biggest technology firm by revenue, estimated Tuesday its 2013 fourth-quarter operating profit at 8.3 trillion won (US$7.78 billion).

The preliminary estimate represents a 6.11 percent decline from the operating profit of 8.84 trillion won a year earlier, the South Korean tech giant said in a regulatory filing.

The figure also marks an 18.31 percent decrease from the record 10.16 trillion won posted over the July-September period of 2013.

Fourth-quarter sales were estimated at 59 trillion won, up 5.24 percent from the 56 trillion won a year earlier, according to the company's earnings guidance, which did not provide figures for each of its business divisions.

Samsung estimated its 2013 sales at an all-time high of 228 trillion won, up 13.59 percent from the 201.1 trillion won posted a year earlier.

Its annual operating profit also climbed 26.5 percent to reach a record 36.77 trillion won over the cited period, its regulatory data showed.

"Samsung's IT and mobile division is anticipated to have raked in 6 trillion won in operating profit for the fourth quarter, with another 2 trillion won from its semiconductor business," said Lee Min-hee, a researcher at I'M Investment & Securities Co.

"Although the company logged robust earnings in the first nine months of 2013, the weaker-than-expected performance in the last quarter, led by weak sales of its new smartphone line-up, limited its annual earnings estimates," Lee added. "It is expected to maintain a weak performance for the time being in 2014."

   Earlier this month, brokerage houses from home and abroad had slashed Samsung's fourth-quarter earnings outlook, with foreign analysts suggesting figures around 8 trillion won while local securities firms held comparable numbers of around 9 trillion won.

The downgrade rally came as Samsung Group's electronics unit paid massive bonuses to its employees last year to commemorate the 20th anniversary of its so-called New Management Initiative, Samsung's key business strategy.

Sources said the combined amount of bonuses paid out by Samsung in fiscal 2013 came to 3.2 trillion won, up 21 percent from the record 2.4 trillion won estimate made in 2012.

Some analysts considered such event as a one-off factor that does not fundamentally damage its quarterly earnings, and others saw the prolonged patent battle with Apple Inc. as a potential major drag on the South Korean tech giant's earnings.

The tech industry leaders are locked in patent suits across the world, with different courts issuing different rulings.

The appreciation of the local currency against the U.S. dollar also dented Samsung's earnings, as such conditions made South Korean goods less price-competitive in overseas market.

The increased marketing costs amid heightened competition in the global smartphone market, as well as expanded spending in research and development of its display sector also weighed down on Samsung's fourth-quarter earnings, analysts added.

Despite challenges from home and abroad, however, a market report showed Tuesday Samsung is expected to sell nearly 400 million units of smartphones around the globe in 2014.

Sales estimate for this year came to 398 million units to account for 34.6 percent of the global market, according to a report by industry researcher Strategy Analytics.

The figures mark an increase from 329.3 million units tallied for last year, when the tech giant accounted for a record 32.9 percent share of the global market.

The volume of smartphones sold by Samsung has been growing steadily since 2007, with its market share also boasting a gradual increase since 2009.

The report said Samsung's combined shipments of mobile phones, including traditional feature phones, is also anticipated to reach 499 million units to account for 28.2 percent of the world's market.

Strategy Analytics added that Apple Inc. is anticipated to maintain its No. 2 position player through 2014, with LG Electronics Inc. moving up a notch to become the third player, trailed by China's Huawei Technologies Co.

Samsung, also the world's leading smartphone and memory-chip maker, is scheduled to announce its fourth-quarter earnings later this month.

Shares of Samsung Electronics traded at 1,305,000 won Tuesday as of 9:45 a.m. on the main bourse, down 0.15 percent from Monday.

The figure also marks a 4.8 percent drop from the last trading session of 2013. The guidance was released before the local stock market opened.

colin@yna.co.kr

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