(LEAD) Samsung's Q4 net sinks 38 pct on memory chip slump

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By Joo Kyung-don

SEOUL, Jan. 30 (Yonhap) -- Samsung Electronics Co. said Thursday its fourth-quarter net profit dropped 38.2 percent compared with a year ago as an extended slump in the memory chip sector weighed on its bottom line.

The world's leading memory chip and smartphone manufacturer said its net income stood at 5.23 trillion won (US$4.4 billion) in the October-December period, compared with 8.46 trillion won a year earlier.

Its operating profit slid 33.7 percent on-year to 7.16 trillion won in the fourth quarter, but sales rose 1.05 percent to 59.88 trillion won over the cited period.

The figures were in line with the earnings guidance announced earlier this month.

For 2019, Samsung posted a net income of 21.74 trillion won, down 51 percent from a year ago, as a slowdown in the global economy, sparked by the U.S.-China trade war, ended a two-year boom in the memory chip market, where the company earns the majority of its entire profit.

Samsung's operating profit in 2019 stood at 27.76 trillion won, marking a 52.8 percent on-year drop and the lowest since 2015, when the comparable figure was 26.4 trillion won.

Its revenue reached 230.4 trillion won last year, a 5.5 percent fall from 2018, and the lowest since 2016, when the company logged 201.8 trillion won.

Revenue from the semiconductor division stood at 16.79 trillion won in the last three months of 2019, a 10.4 percent decline from a year earlier. Its operating profit from the semiconductor business was 3.45 trillion won, down 55 percent over the cited period.

"The memory business reported a year-on-year decline in profit as DRAM prices continued their downward trend despite rising shipments," Samsung said. But its logic chip business posted a rise in profit due to increasing demand for high-resolution image sensors and high performance computer chips, it said.

Samsung's display panel business also posted a poor result. It saw 8.05 trillion won in sales, down 12 percent from a year earlier, while operating profit plunged 77 percent on-year to 220 billion won in the fourth quarter.

"The mobile display division saw profit decline because of a higher cost burden caused by lower fab utilization amid weaker demand for some premium products," the company said. "Large displays suffered a bigger loss from a continued decline in LCD panel prices."

There was a strong performance from Samsung's IT & Mobile Communications (IM) division, however, which offset the decline in overall earnings.

The mobile business posted sales of 24.95 trillion won in the fourth quarter, up 7 percent from a year earlier, while operating profit jumped 67 percent on-year to 2.52 trillion won.

"Quarterly earnings improved significantly thanks to solid sales of flagship Galaxy smartphones and lineup changes to improve profitability for mass-market models," Samsung said. "Profit fell from the previous quarter, however, due to the fading effect from a new flagship product launch."

Samsung's Consumer Electronics (CE) business division also reported an increase in fourth-quarter earnings, with sales rising 7.8 percent on-year to 12.71 trillion won and operating profit soaring 19.1 percent on-year to 810 billion won, thanks to solid sales of its premium TVs.

"QLED TV sales in the fourth quarter were more than twice the amount sold in the same period a year ago," the company added.

kdon@yna.co.kr
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