Samsung Q4 2011 Profit Rose By 17% – Smartphone Business Feels Heat

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Samsung became the world’s biggest IT maker after surpassing the PC manufacture giant HP in 2009 and, currently, the company is leading in TV segment. The company’s Q4 profit has incredibly risen by 17%, but it’s astounding to learn that its Smartphone business has comes under pressure. The increment in the demand of memory chips has leaded the company’s semiconductors profit to the highest level since Q3 of 2010.

The demand of Samsung’s Smartphone augmented to 30% in Q4 of 2011; in spite of this, it contributed a smaller profit margin in Q4—because of low price of Smartphone due to intense competition—than Q3. However, the rise in the demand of Smartphone has incredible contributed at the bottom level to improve the company’s profit.

Samsung reported 35 million Smartphone’s shipment in the last quarter 2011, behind Apple—recently announced 37 million sales of Smartphone in its Q4 2011. The net profit of the company is four trillion in 2011, greater than 3.42 trillion a year ago. In addition, the revenue of the company also rose by 13% to 47.3 trillion from 41.9 trillion. Whereas, operating profit of the company has surpassed its previous record of 5 trillion in Q2 of 2010 to 5.3 trillion in Q4 of 2011.

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The operating-profit margin of chip business of the company also grew up to 25.1% in last quarter of 2011 from 19.5% in the Q4 of 2010. Besides, there’s a stringent demand of the company’s flash-memory and logic chips in the market.

Samsung’s investors relations chief—Bob Yi—said, “Samsung’s overall cellphone growth was smaller than the industry’s growth, and the company wants to reverse that in the Q1 of 2012.” Others two main businesses of the company LCD components and consumers electronics goods continued to have a marginal effect on the company’s bottom line.

Samsung is a giant consumers-electronics manufacturer and world’s biggest TVs seller, produced an operating-profit margin of 3.4% which is highest since Q1 of 2010. However, the company has faced a small operating loss in Q4 due to oversupply of LCD screen. Recently, the company has decided to invest on the $41billion on the technology to contend their rival in the battlefield.

Source: Wall Street Journal  

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