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Galaxy sales boost Samsung profits

Samsung has revealed that quarterly profit soared 76 percent, boosted by the popularity of its Galaxy smartphones, which outsold the iPhone for a fourth straight quarter.

But the company said it expects earnings to decline during the current quarter because of seasonally low demand for consumer electronics.

It is also leaving its 2013 capital expenditure at the same level as last year at 23 trillion won (13.6bn), underlining uncertainty about the global economy and declining demand for personal computers.

The strong South Korean won is also becoming a negative for Samsung. It expects more than 3 trillion won will be shaved from its 2013 operating profit due to the stronger local currency. Samsung's shares fell as much as 3 percent after earnings release.

Net profit for the final quarter of 2012 totalled 7.04 trillion won ($6.6 billion), a 76 percent surge from 4.01 trillion won a year earlier. Analysts had expected 6.95 trillion won in net profit, according to financial information provider FactSet. Sales rose 19 percent over a year earlier to 56.06 trillion won and operating income jumped 89 percent to 8.84 trillion won.

Increased sales of smartphones were the key source of its profit growth. Samsung, which overtook Apple as the top smartphone maker last year, said its operating profit from the division that makes and sells smartphones and tablets more than doubled to 5.44 trillion won in the fourth quarter, from 2.56 trillion won a year earlier.

Most analysts believe Samsung shipped more than 60 million smartphones, including the Galaxy S III and Galaxy Note II, during the three months ending in December, which would put the year's smartphone sales at more than 200 million. Apple said it sold 47.8 million iPhones in the quarter.

Hong Kong-based research firm Counterpoint Research said Samsung took 33 percent market share in the fourth quarter, compared with Apple's 21 percent. Another market researcher IDC put Samsung's share at 29 percent versus Apple's 22 percent.

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