Samsung posts record operating profit in fourth-quarter

The South Korean company sells 15m Galaxy S3 smartphones.

New Statesman
Photograph: Getty Images.

Samsung Electronics has registered a record growth in operating profit and revenue for the fourth-quarter of 2012 driven by strong performance of smartphone division, despite tough competition from its rival Apple.

For the fourth-quarter, the company’s operating profit grew by 88 per cent to 8.8tn South Korean won, while revenue increased by 18 per cent to approximately 56tn South Korean won.

In the third-quarter of 2012, the company’s handset division contributed about two-thirds of earnings.

Industry analysts predicted that Apple's launch of iPhone 5 in October 2012 could hamper sales of Samsung’s smartphone and tablets. However, Samsung’s strong product portfolio helped it to gain momentum over Apple’s products.

In August 2012, Samsung paid $1bn for infringement of patents related to Apple’s iPhone.

Marcello Ahn, an analyst at Nomura, told the Financial Times that the investors were taking profits following a strong run that had seen the shares rise 19 per cent since the beginning of September.

“For the share price to move by another jump from this level, we must see Samsung diversifying its [earnings base] into tablets and PCs,” Ahn said.