Samsung extends record profit in Q4
2017 full-year operating profit hits record W53.6 trillion
By Kang Seung-woo
Samsung Electronics posted an operating profit of 15.1 trillion won in the fourth quarter, up 63.7 percent from a year earlier, its biggest ever quarterly profit, the company said in a preliminary earnings report Tuesday.
This is a 3.9 percent gain from a quarter earlier. Samsung issued a quarterly earnings guidance before releasing a finalized earnings report later this month.
It posted a record 53.6 trillion won in operating profit for 2017. Over the year its operating profit has steadily grown from 9.9 trillion won in the first quarter to 14.07 trillion won in the second and 14.5 trillion won in the third. Its previous full-year profit record was 36.7 trillion won in 2013.
Analysts said that the announcement is carrying extra weight given that Samsung’s yearly operating profit has exceeded 50 trillion won for the first time.
Its operating margin was also a record 22.4 percent.
During the October-December period, Samsung reported sales of 66 trillion won, up 23.8 percent from a year earlier, with the full-year sales reaching 239.6 trillion won.
Samsung did not unveil profits of each division, but its strong performance in the semiconductor business is believed to be the key driver behind the record profit.
Samsung is a leading manufacturer in the global memory chip market, or DRAM and NAND flash _ the former is used for desktop computers and the latter are the building blocks for mobile devices such as smartphones.
Thanks to booming memory chip sales, Samsung made 24.3 trillion won in operating profit from January to September last year and it was also estimated to have made up to 11 trillion won in the final quarter.
Despite concerns that the current memory chip boom has peaked, Samsung has supplied its cutting-edge products to major information technology (IT) companies, raising speculation that its chip business is expected to remain strong for the time being.
“The memory chip boom is likely to continue in 2018 as the DRAM price is forecast to keep rising in the first quarter of the year,” said Lee Jae-yoon, an analyst at Yuanta Securities.
“Its System LSI business performs well and memory chip prices will remain strong, so its first-quarter operating profit could be 10.6 trillion won.”
The System LSI is comprised of system semiconductor and foundry businesses.
With regard to the overall first-quarter profit, Lee Seung-woo, a researcher at Eugene Investment and Securities, said it is “expected to stand at around 15 trillion won” although the strong Korean won against the U.S. dollar could be a drag.
The country’s currency has been appreciating for months amid the global trend of the weakening greenbac