Samsung returns to profit in Q4

Fri, 01/29/2010 - 7:15am
Kelly Olsen, AP Business Writer

SEOUL, South Korea (AP) – Samsung Electronics Co. returned to profit in the fourth quarter as demand for flat-screen televisions and mobile phones helped push sales to a record high, underlining Samsung's rise to the top tier of global technology companies.

The company, a major producer of consumer electronics products and components that make them work, earned 3.05 trillion won ($2.64 billion) in the three months ended Dec. 31 on a parent basis. Samsung does not release a consolidated net profit figure.

Samsung said, however, that sales on a consolidated basis – which includes the performance of its overseas and domestic subsidiaries excluding financial businesses – reached a record 136.29 trillion won, or nearly $118 billion, at Friday's exchange rate.

That places Samsung slightly above Hewlett-Packard Co., which in November reported sales for fiscal year 2009 ended Oct. 31 of $114.6 billion. Palo Alto, Calif.-based HP is considered the world's biggest technology company.

Such a comparison is not direct, however, as HP has yet to report results for the final two months of 2009, and movements in the often volatile South Korean won can influence the size of Samsung's sales when converted into dollars.

Still, Samsung's sales figure highlights its emergence as one of the world's top technology companies. The Suwon, South Korea-based corporation is the largest manufacturer of computer memory chips, flat-screen televisions and liquid crystal displays. It ranks No. 2 in cell phones behind Finland's Nokia Corp.

Samsung's profit was a huge turnaround from its net loss of 22 billion won in the fourth quarter of 2008. That red ink – its first net loss since it began reporting results on a quarterly basis in the third quarter of 2000 – sent shockwaves through the company and came as the global economic slump hit demand.

Samsung said its "strong performance" during the fourth quarter last year was bolstered by improving prices for memory chips and a seasonal increase in sales of consumer electronics.

The company said it sold nearly 11 million flat-screen TVs in the quarter, becoming the first manufacturer to exceed the 10 million mark.

Mobile phone handset sales in the quarter jumped 16 percent from a year earlier to 69 million. Total 2009 sales reached 227 million.

Looking ahead, Samsung said it expects "positive growth across its businesses in 2010," citing stronger demand for flat-screen TVs, mobile phones and laptop computers resulting from the ongoing economic recovery.

Samsung said parent sales in the fourth quarter reached 25.32 trillion won, which was 37 percent higher than 18.45 trillion won reported a year earlier.

In a separate regulatory filing, the company said that it earned 9.65 trillion won in all of 2009 on a parent basis, up 75 percent from 2008. Samsung also said sales last year rose 23 percent to 89.77 trillion won from 72.95 trillion won the year before.

Shares in Samsung, which released its earnings results about 30 minutes after the stock market opened, fell 3 percent to close at 784,000 won. The company's stock price rose 77 percent in 2009.

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