SEOUL (dpa-AFX) - Samsung Electronics Co Ltd. (SMSN.L, SSNNF.OB, SSNLF.OB) reported record quarterly profit for the fourth-quarter reflecting strong demand for memory chips and sales of high-end displays for the iPhone X. The Board of Directors of the company approved a 50:1 stock split. The Board also approved a year-end dividend of 21,500 Korean won per common share and 21,550 won per preferred share.
Net income Attributable to the Shareholders of the Parent Company for the fourth-quarter rose 73.72 percent to 12.02 trillion won from 6.92 trillion won in the same quarter last year.
Operating profit for the quarter was 15.15 trillion won, up 64.27 percent from 9.22 trillion won in the previous year.
Fourth quarter earnings were driven by the components business, with the largest contribution coming from the Memory business that manufactures DRAM and NAND, as orders for high-performance memory products for servers and mobile storage were strong. However, weak seasonality impacted growth for the System LSI and Foundry businesses.
The Display Panel business, which manufactures OLED and LCD screens, saw increased shipments of OLED panels for premium smartphones, but profitability for LCD panels decreased due to weak seasonality, which dampened sales and ASP.
Revenue jumped 23.71 percent to 65.98 trillion won, from 53.33 trillion won in the prior year.
The Semiconductor businesses posted 10.90 trillion Won in operating profits on consolidated revenue of 21.11 trillion Won for the quarter.
Looking ahead, the first quarter, despite being a traditionally slow season, is expected to show strong demand for memory products used in datacenters. Shipments of System LSI products are forecast to pick up, as orders for APs and image sensors for flagship devices are expected to improve.
he Display Panel business in the first three months of the year is likely to face challenges such as intensified competition from LTPS LCD vendors and seasonally weak LCD demand. In spite of this, Samsung will try to improve profitability by increasing the high-end LCD portion of screens and enhancing productivity of flexible OLED panels, among other measures.
In 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's TV business will be affected by weak seasonality, but is aiming to be profitable by expanding sales of premium products and pushing for the early release of new models. Meanwhile, the Digital Appliances Business will focus on achieving growth by increasing sales of premium products and strengthening marketing.
In 2018, demand for NAND is likely to remain strong and market conditions are forecast to be stable. Samsung will expand 64-layer V-NAND production mainly at its Pyeongtaek plant. As for DRAM, the company expects solid demand growth due to new datacenter builds and will increase product competitiveness by expanding 10nm-class process migration.
For the Display Panel business in 2018, the company expects OLED to become a mainstream panel in the smartphone industry and will reinforce its competencies in new applications such as foldable, automotive, and IT displays.
For Mobile in 2018, the company will pursue earnings growth by increasing premium products sales and maintaining profitability of mid-range to low-end products. The Networks Business plans to expand the supply of network solutions for 5G commercialization to major markets including Korea, the U.S., and Japan.
The company said its Board believes the stock split announced today will make investing in the company more accessible and provide dividends to a wider range of investors from 2018.
Copyright RTT News/dpa-AFX