Synopsis
Samsung Electronics revealed that its net income for Q4 increased by over 20% from the previous year, defying declining global memory chip demand and exceeding market expectations. The company's financial performance highlighted strong sales in its semiconductor sector, despite some challenges in other divisions.Key Takeaways
- Net income rose over 20% year-on-year.
- Operating profit increased by nearly 130%.
- Sales reached 75.78 trillion won.
- Memory chip sales hit a record high.
- The mobile division's performance faced challenges.
Seoul, Jan 31 (NationPress) Samsung Electronics announced on Friday that its net profit for the fourth quarter surged by over 20 percent compared to the same period last year, despite a decline in global demand for memory chips, surpassing market forecasts.
The company's net income reached 7.75 trillion won (approximately $5.4 billion) for the October-December timeframe, reflecting a 22.2 percent increase from 6.34 trillion won a year prior, as detailed in a regulatory submission.
Furthermore, operating profit skyrocketed by 129.9 percent year-on-year to 6.49 trillion won, while overall sales grew by 11.8 percent to 75.78 trillion won.
These earnings surpassed market anticipations, with analysts estimating an average net profit of 5.69 trillion won, according to data from Yonhap Infomax, a financial information service of Yonhap News Agency.
However, the operating profit fell short of market predictions by 15.7 percent due to poor sales of conventional memory chips for PCs and IT devices, alongside suboptimal performance from artificial intelligence (AI) products, including high bandwidth memory (HBM).
Samsung's pivotal semiconductor sector reported an operating profit of 2.9 trillion won on 30.1 trillion won in sales during the final quarter.
In the fourth quarter, memory chip sales achieved a record high, with rising dynamic random-access memory (DRAM) prices attributed to increased HBM chip sales and high-density Double Data Rate 5 (DDR5) products.
Nonetheless, operating profit slightly decreased from the previous quarter due to elevated research and development (R&D) costs and initial expenses related to facility expansion.
Moreover, the company experienced a decline in operating profit from its fabless division, known as System Large Scale Integration (LSI), and foundry operations during this quarter.
The two non-memory sectors of Samsung Electronics are projected to incur over 2 trillion won in operating losses for the fourth quarter, contrasting sharply with the 5 trillion won operating profit generated by the memory division.
Samsung's device division, which encompasses mobile, television, and home appliance businesses, achieved 40.5 trillion won in sales and 2.3 trillion won in operating profit for the fourth quarter.
Operating profit from the mobile sector dipped slightly from the previous three months, primarily due to sluggish sales of its flagship smartphones.
Additionally, the television and home appliance segments faced a decline in quarterly profits amid growing competition and rising expenses.
In the mobile sector, Samsung anticipates that the recently launched Galaxy S25 series will stimulate sales growth in the upcoming quarters and position the company as a leader in the AI smartphone market.
Analysts have indicated that HBM product sales will be crucial for further enhancing the company's performance moving forward.
