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A Samsung tablet runs a Ustream App at the Verizon booth during the 2012 International Consumer Electronics Show (CES) in Las Vegas, Nevada, January 11, 2012. (Steve Marcus/Reuters)
A Samsung tablet runs a Ustream App at the Verizon booth during the 2012 International Consumer Electronics Show (CES) in Las Vegas, Nevada, January 11, 2012. (Steve Marcus/Reuters)

Samsung forecasts record $8.3-billion profit Add to ...

Samsung Electronics Co. Ltd., the world leader in mobiles and memory chips, said it likely earned a quarterly profit of $8.3-billion (U.S.), as it sold close to 500 handsets every minute and as demand picked up for the flat screens it makes for mobile devices, including those for rival Apple Inc. products.

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That run of five straight record quarters may end in January-March on weak seasonal demand, though a strong pipeline of smartphones – the South Korean group’s biggest earner – and improving chip prices have eased concerns that earnings growth could slow this year, powering Samsung shares to record levels.

Ahead of full quarterly results due by Jan. 25, Samsung on Tuesday estimated its October-December operating profit jumped 89 per cent to 8.8 trillion won from a year ago, just topping an average forecast for 8.7 trillion won in a Reuters survey of 16 analysts. That is 8.6 per cent more than the previous record in July-September. The company estimated its fourth-quarter sales at 56 trillion won ($52.6-billion).

Shares in Samsung, valued at close to $230-billion, gained 44 per cent in 2012, easily outpacing a 9 per cent rise on the broader South Korean market and beating Apple’s 31 per cent increase.

Shipments of Samsung’s flagship Galaxy S III, which overtook the iPhone 4S in the third quarter to become the world’s best-selling smartphone, are likely to have slipped to around 15 million in the last quarter from 18 million in July-September. But estimated sales of around 8 million Galaxy Note II phone-cum-tablets, or phablets, should more than make up for that – pushing overall smartphone shipments to around 63 million, analysts estimate.

There has been increased speculation that Samsung will launch the next version of its Galaxy S in the first quarter, possibly with an unbreakable screen and full high-definition quality resolution boasting 440 pixels per inch, as well as a better camera and a more powerful processor.

While Apple depends on a single smartphone model, the iPhone, Samsung blankets the market with a range of devices – from the very high-end to cheaper and regional alternatives. The South Korean group put out 37 variants last year – increasing its share of the market to 35 per cent in the third quarter, according to Mirae Asset Securities – against HTC Corp.’s 18 models, Nokia’s 9 and LG Electronics’ 24. Apple rolled out just the iPhone 5.

Samsung is expected to further widen its lead over Apple this year, driven by its diversified product lineup, according to market researcher Strategy Analytics, which predicts Samsung will sell 290 million smartphones, up from a projected 215 million in 2012. It sees Apple’s smartphone sales hitting 180 million, up a third per cent from last year.

Recovering chip prices and flat screen sales will also have boosted Samsung’s component earnings, propelled by booming sales of mobile devices, including those of rival Apple, whose iPhones, iPads and iPods use Samsung chips, micro-processors and flat screens.

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