Samsung's operating profit rises 73% due to surging sales of Galaxy phones

SEOUL: Samsung Electronics, Asia's largest consumer-electronics company, reported a record quarterly profit on surging sales of Galaxy phones and a one-time gain from selling its hard-disk drive business. Operating profit (005930) increased 73% to 5.2 trillion won ($4.5 billion) in the three months that ended in December, the Suwon, South Korea-based company said in a statement on Friday. That beat the 4.6 trillion-won average of 29 analyst estimates compiled by Bloomberg. Sales rose 12% to 47 trillion won.

Mobile-phone sales surpassed a record 300 million units last year as Galaxy smartphones helped win consumers amid competition with Apple's iPhone. Samsung, which sold its hard-disk drive business to Seagate Technology, is introducing more mobile devices to offset slumping profits at the chip and flat-screen panel businesses.

"The mobile business is generating a huge chunk of profit now," James Song, a Seoul-based analyst at Daewoo Securities, said by telephone. "It may be getting harder for Apple to catch up because they only have a limited number of models." Samsung shares fell 1.4% to 1,040,000 won at the 3 pm close of trading in Seoul, while the benchmark Kospi index declined 1.1%.

While smartphone sales helped propel Samsung's revenue to a record last year, fourth-quarter operating profit was inflated by proceeds from the Seagate deal, James Chung, a Seoul-based spokesman for the Suwon, South Korea-based firm, said after the announcement.