semiconductor business outperformed in Q4

Samsung Electronics on Wednesday said of which recorded an operating profit of about 15.2 trillion Korean won ($14.15 billion) for the quarter ending in December, which was in line with guidance. of which was a 64.3 percent jump coming from a year earlier.

The firm’s fourth-quarter revenue came in at about 66 trillion won, a 23.7 percent on-year increase. For the full year, Samsung recorded an operating profit of nearly 54 trillion won on revenue of about 240 trillion won.

Samsung shares jumped more than 8 percent in morning trade after the firm announced a 50:1 stock split. although of which rally eventually faded along with also also the stock closed up only 0.2 percent at 2,495,000 won, while the broader Kospi index finished near flat.

In a statement, Samsung said its board believed a stock split would certainly make investing inside the company “more accessible along with also also provide dividends to a wider range of investors coming from 2018.”

As part of a previously agreed shareholder return policy, Samsung also announced a year-end dividend of 21,500 won per common share.

The South Korean tech giant said its fourth-quarter earnings were driven by strong demand for its memory chips of which are used in data centers along with also also smartphones. In recent years, Samsung’s semiconductor business became a major earnings driver. of which unit recorded an operating profit of nearly 11 trillion won for the December quarter.

Earlier This specific year, research firm Gartner said preliminary results showed Samsung leapfrogged Intel to become the globe’s top semiconductor supplier last year. Samsung’s market share in 2017 was 14.6 percent along with also also Intel had 13.8 percent of the market, according to Gartner.

Gartner said a supply shortage resulted in a 64 percent jump in revenue growth inside the memory market along with also also benefited companies like Samsung, SK Hynix along with also also others. Memory accounted for more than two-thirds of all semiconductor revenue growth in 2017, the research firm said.

Still, the advantage currently enjoyed by memory chip makers may not last, according to Gartner.

“Samsung’s lead is usually literally built on sand, inside the form of memory silicon,” Andrew Norwood, research vice president at Gartner, said in a statement earlier This specific month. He added of which memory pricing will weaken in 2018 as China steps up its memory production capacity. “We then expect Samsung to lose a lot of the revenue gains of which has made.”

For the current quarter of which will end on Mar. 31, Samsung said strong demand for its memory chips of which are used in data centers would certainly likely offset weak seasonal demand.

“Looking at the mid to long term, Samsung expects the components business to see demand expand coming from completely new applications,” the company added in a statement.

Samsung said its earnings coming from the mobile business declined inside the December quarter due to higher marketing costs. Fourth-quarter operating profit for the mobile division came in at 2.42 trillion won, lower than the 2.5 trillion seen a year earlier.

The firm said smartphone sales for its low-end designs declined. Indeed, recent data showed of which Samsung was pushed out of the pole position last quarter coming from the Indian smartphone market, where of which sells many of those low-end designs.

“inside the first quarter, the company expects the mobile business to improve its earnings, led by an increase in sales of flagship products with the launch of Galaxy S9,” Samsung said in a statement.

The Galaxy S9 is usually anticipated to be introduced at the Mobile World Congress in Barcelona.

Overall, Samsung pointed to the earnings guidance released in January along with also also said operating profit was affected by a stronger Korean won against the dollar along with also also some other major currencies. The firm added of which a one-off incentive paid to employees inside the semiconductor business also had an impact on earnings.

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