* Q4 operating profit seen at record 8.7 trln won
* Handset division profit estimated at 5.8 trln won
* Strong recovery in chips, displays adding to smartphone
* Q1 profit may dip on weak seasonal demand for phones
* Shares at life high last week; gained 44 pct in 2012
By Miyoung Kim
SEOUL, Jan 7 Samsung Electronics,
the world leader in mobiles and memory chips, likely earned a
quarterly profit of $8.1 billion, as it sold close to 500
handsets every minute and as demand picked up for the flat
screens it makes for mobile devices, including those for rival
Apple Inc products.
That run of five straight record quarters may end in
January-March on weak seasonal demand, though a strong pipeline
of smartphones - the South Korean group's biggest earner - and
improving chip prices have eased concerns that earnings growth
could slow this year, powering Samsung shares to record levels.
"Guidance is unlikely to disappoint given new product
launches and a further upturn in cyclical parts of the
business," said Morgan Stanley analyst Shawn Kim. "Smartphone
momentum has not decelerated, despite Apple's new iPhone, and
the business continues to be driven by its flagship products.
"This time, it's the Galaxy Note II ... with the upside in
unit shipments mainly from the U.S. We expect strong momentum to
continue in the first quarter."
While Apple rolled out just a single new smartphone, the
iPhone 5, last year globally, Samsung bombarded the market with
37 variants tweaked for regional and consumer tastes, from
high-end smartphones to cheaper low-end models. By comparison,
Taiwan's HTC Corp released 18 models, Nokia
9 and LG Electronics 24.
Samsung, valued at close to $230 billion, gives its
October-December earnings guidance on Tuesday before the market
opens. The full earnings release is expected by Jan. 25.
A HIGH NOTE
Shipments of Samsung's flagship Galaxy S III, which overtook
the iPhone 4S in the third quarter to become the world's
best-selling smartphone, are likely to have slipped to around 15
million in the last quarter from 18 million in July-September.
But estimated sales of around 8 million Galaxy Note II
phone-cum-tablets, or 'phablets', should more than make up for
that - pushing overall smartphone shipments to around 63
million, analysts estimate.
There has been increased speculation that Samsung will
launch the next version of its Galaxy S in the first quarter,
possibly with an unbreakable screen and full high-definition
quality resolution boasting 440 pixels per inch, as well as a
better camera and a more powerful processor.
"Samsung's smartphone shipments are likely to grow even in a
seasonally weak first quarter. The early launch of the Galaxy S
IV would drive second-quarter growth momentum," said BNP Paribas
Securities analyst Peter Yu, who predicts Samsung's 2013
operating profit will grow 25 percent to almost $35 billion.
Samsung is forecast to raise its smartphone sales by 35
percent and widen its lead over Apple this year, driven by its
diversified product line-up, said Neil Mawston, Executive
Director at market researcher Strategy Analytics, which
forecasts Samsung will sell 290 million smartphones this year,
up from a projected 215 million in 2012.
Apple's smartphone sales are projected to reach 180 million
this year, up by a third from last year's 135 million.
Samsung is likely to say on Tuesday that its
October-December operating profit increased 65 percent to 8.7
trillion won from a year ago, a Reuters survey of 16 analysts
showed. That would be 7 percent higher than its previous record
of 8.1 trillion won in July-September.
Profits from the mobile division are seen slightly higher,
at around 5.8 trillion won, than the previous quarter's 5.63
trillion won - and more than double last year's level. A
recovery in chip prices and flat screens may have also boosted
its component earnings, propelled by booming sales of mobiles
carrying Samsung's chips, micro-processors and flat screens.
Reflecting the upbeat outlook, shares in Samsung, Asia's
most valuable technology stock, last week hit a life high of
1.584 million won ($1,500). The stock gained 44 percent in 2012,
easily outpacing a 9 percent rise on the broader Korean market
and topping Apple's 31 percent increase.
The shares eased a third of one percent on Monday.
Samsung, LG Electronics and four Taiwan companies were last
week fined millions of dollars for allegedly manipulating liquid
crystal display panel prices in China in 2001-06, the state-run
news agency Xinhua reported.