Samsung Q4 profits top forecasts on Galaxy sales

Samsung's quarterly profits soar 76%

Samsung Electronics said its quarterly profit soared 76%, boosted by the popularity of its Galaxy smartphones, which outsold the iPhone for a fourth quarter in a row.

However 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 ($21.5 billion). This underlines uncertainty about the global economy and declining demand for personal computers.

The strong South Korean won is also becoming a negative for Samsung and it said it expects more than 3 trillion won will be shaved from its 2013 operating profit due to the stronger local currency.

Net profit for the final quarter of 2012 totaled 7.04 trillion won ($6.6 billion), a 76% surge from 4.01 trillion won a year earlier. Analysts had expected 6.95 trillion won in net profit. Sales rose 19% over a year earlier to 56.06 trillion won and operating income jumped 89% 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 the South Korea-based 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% market share in the fourth quarter, compared with Apple's 21%. Another market researcher IDC put Samsung's share at 29% versus Apple's 22%.

The company's component divisions that make semiconductor products and display panels also benefited from a rise in demand for smartphones. Sales of mobile processors that power popular devices such as Apple's iPhones and Samsung's own Galaxy smartphones boosted the bottom line.