Samsung sees record 2010 sales, operating profit

[January 07, 2011]  SEOUL, South Korea (AP) -- Samsung Electronics said Friday that both sales and operating profit likely rose to record highs in 2010 despite sluggishness at the end of the year amid lower prices for televisions and semiconductors.

The manufacturer of the 7000 Series 3D flat panel TV estimated that consolidated revenue during 2010 came to 153.76 trillion won ($137.31 billion), which would be an increase of 13 percent from the previous year's record performance of 136.32 trillion won.

The company also said that operating profit for last year is expected to reach 17.28 trillion won, a surge of 58 percent from 2009.

Samsung's stellar performance further cements the position it has gained over the past decade as a dominant global consumer technology company, surging past Japanese rivals such as Sony Corp.

Suwon, South Korea-based Samsung Electronics Co. ranks as the world's biggest manufacturer of memory chips, liquid crystal displays and flat-screen televisions. It stands No. 2 in mobile phones behind Finland's Nokia Corp. and aims to challenge the dominance of Apple Inc.'s iPhone with its Galaxy S smartphone.

The company, as usual, gave no reason for the expected business results and plans to release details when it formally announces earnings at the end of this month, according to spokesman Jason Kim.

Samsung does not release net profit estimates. Operating profit is seen as a direct indicator of business performance before taxes, dividends, asset sales and other items that are figured into net profit or loss.

The expected annual results, while impressive, mask weakness in the fourth quarter.

Samsung estimated consolidated sales of between 40 trillion won and 42 trillion won for the three months ended Dec. 31, compared with sales of 40.23 trillion won in the same period a year earlier.

The company also sees operating profit of between 2.8 trillion won and 3.2 trillion won for the final three months of last year. That would be down from 3.44 trillion won in the fourth quarter of 2009 and also below 4.86 trillion won in the third quarter of last year.

Lee Min-hee, an analyst at Dongbu Securities in Seoul, said that Samsung's earnings suffered in the fourth quarter from falling prices for semiconductors and LCDs as well as price cuts it carried out for televisions in an attempt to better compete with rivals.

"Samsung aggressively cut their TV prices and gained market share again in the fourth quarter," said Lee, who estimates the company will record a net profit of 3.02 trillion won for the fourth quarter, well below the record 4.46 trillion won booked in the previous three months.

The company racked up record net profit results in each of the first three quarters of last year.

Samsung Group, the massive business conglomerate that the electronics giant anchors, said Wednesday it plans to carry out record investment of 43.1 trillion won this year and also increase new hires to an all-time high of 25,000.

Samsung Electronics began issuing earnings estimates, or guidance, in 2009 in hopes that increased transparency would help minimize market speculation over its performance. The estimates include the performance of its overseas and domestic subsidiaries.

The company's shares fell 1 percent to close at 921,000 won Friday on South Korea's benchmark stock exchange. Samsung's stock price rose 19 percent in 2010.

[Associated Press; By KELLY OLSEN]

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