Samsung’s Q1 2012 Rakes In Record $4.46 Billion In Profits – Samsung Exec Confirms “Galaxy S III” Name?


As if you needed any further proof that Samsung is dominating the Android (and mobile) market, look no further than their Q1 2012 earnings report. Today, Samsung reported that they managed to rake in a cool $40 billion in sales with a record $5.1 billion in operating profit (appox $4.46 billion after taxes). Samsung is up with a 98% gain over this same time last year, and it’s all thanks to their smartphone division which accounted for 73% of their profits.

And it looks like “record earnings” is a phrase you’re going to hear a lot this year when it comes to Samsung. Their Galaxy S III has already generated worldwide “next-gen iPhone-like buzz” with Samsung saying, “We are anticipating strong demand for the Galaxy S III,” and that they expect it to be their “most successful smartphone ever.” Looks like it will be called the Galaxy S III after all? Only a few more days until we get to see the GS3 unveiled next week and hopefully it lives up to all of our expectations. Full press release below.

Samsung Electronics Announces First Quarter 2012 Earnings Results
(SEOUL–Korea Newswire) April 27, 2012 — Samsung Electronics Co., Ltd. today announced revenues of 45.27 trillion Korean won on a consolidated basis for the first quarter ended March 31, 2012, a 22-percent increase year-on-year.

For the quarter, the company’s consolidated operating profit reached an all-time high of 5.85 trillion won representing a 98-percent increase year-on-year. Consolidated net profit for the January-March period was 5.05 trillion won.

Despite a decrease in sales of semiconductor chips and TVs due to seasonal factors, an increase in profitability in display panels and mobile phones pushed up quarterly operating profit margins by 1.7 percentage points to 12.9 percent.

In its earnings guidance disclosed on April 6, Samsung estimated first-quarter consolidated revenues would reach approximately 45 trillion won with consolidated operating profit of approximately 5.8 trillion won.

Samsung’s strong performance in the quarter was driven mainly by the IT & Mobile Communications (IM) segment, which is comprised of four businesses, Mobile Communications, Telecommunication Systems, IT Solutions and Digital Imaging. In particular, solid growth in the Mobile Communications business, with brisk sales of flagship GALAXY Note and GALAXY S II devices contributed to the company’s profitability.

The consolidated operating profit for IT & Mobile Communications businesses reached 4.27 trillion won on revenue of 23.22 trillion won. The Display Panel business rebounded in the first quarter with operating gains of 280 billion won, following an uptick in demand for high-margin panels used in tablets, 3D/ LED TVs and premium OLED panels.

“Despite difficult business environments including seasonal low demand for major products such as PCs and TVs amid a global economic slowdown, we achieved record quarterly results based on our differentiated products and technology leadership. We cautiously expect our earnings momentum to continue going forward, as competitiveness in our major businesses is enhanced,” said Robert Yi, Senior Vice President and Head of Investor Relations.

Looking into the second quarter, Samsung expects to improve profitability in the chip business with a recovery in PC DRAM price and by expanding its new product category with mobile application processors based on 32 nanometer-class process technology. Samsung plans to also bolster its competitive edge in mobile phones with the debut of new high-end smartphones, and by reinforcing the full lineup of products and its presence in emerging markets.

Capex 7.8 Trillion Won in Q1

Capital expenditure in the first quarter was 7.8 trillion won, with 5.8 trillion won invested in the Semiconductor Business and 1.3 trillion won in the Display Panel segment.

Earlier this year, Samsung announced plans to spend a total of 25 trillion won in capex for 2012.

Fifteen trillion won will be invested in the Semiconductor Business that consists of Memory and System LSI. For the Display Panel segment, 6.6 trillion won has been allocated for investment.

Organizational Change

Starting from the first quarter, the business segment financial disclosure will reflect the organizational changes, which took place in December, 2011. We will provide sales and earnings of Device Solutions, including Semiconductor and Display Panel businesses; and Digital Media & Communications, including IT & Mobile Communications and Consumer Electronics (CE) divisions.

IT & Mobile Communications includes Mobile Communications, Telecommunication Systems, IT Solutions and Digital Imaging; and CE includes Visual Display and Digital Appliances.

Seasonal Factors Dampen Chip Demand

Samsung’s Semiconductor Business – including Memory and System LSI – posted an operating profit of 760 billion won in the first quarter. Revenue retreated to 7.98 trillion won on-year, a 13-percent decrease compared with the same period last year.

Weaker-than-expected off-peak season demand and a global supply crunch of HDDs coupled with low demand for PC DRAM chips and the oversupply of mobile DRAM impacted profit margins, in which the memory portion saw its revenue slip to 4.89 trillion won. For NAND, spot price remained weak due to sluggish demand compounded by early stage products from geometry migration flowing into the channel market.

Despite adverse market conditions, Samsung’s chip business was buoyed by strong demand for server DRAM and by expanding our value-added product mix such as products based on the 30-nanometer-class and 20-nanometer-class process technologies.Increased orders for Solid State Drives (SSDs) and Embedded Multimedia Cards (eMMC) also helped the chip business to cushion the market squeeze.

Looking ahead, the global HDD supply shortage is expected to be alleviated in the second quarter and demand for specialty DRAM products including mobile and server DRAMs will be strong. However, elevated competition among manufacturers of 30-nanometer-class chips will lead to a price decline.

In the second quarter, Samsung is poised to ramp up supply of high-capacity, power-efficient DRAM for servers based on our green memory solution. As for NAND, we will spur growth by expanding the 20-nanometer-class portion. Sales of CMOS image sensors will remain high in the April-June quarter, as demand for smartphones equipped with high-resolution cameras is expected to be strong.

Display Business Swings to Profit

Operating profit for the Display Panel Business turned around from the previous quarter to register 280 billion won on revenue of 8.54 trillion won in the first quarter.

Despite traditionally weak seasonality, continued economic stagnation in Europe, and the prolonged supply shortage in the PC industry, the Display Panel Business was able to improve profitability by expanding sales of high-end premium panels such as LED TV and 3D panels, which pushed TV panel sales up in the mid-20 percent range on-year. Increased sales of high-resolution panels for tablet PCs and OLED panels for smartphones also helped boost profit in the quarter.

Looking ahead, although the market for monitor panels will remain stagnant, demand for tablet and notebook panels is expected to increase on seasonal education-related demand while TV panels are expected to lift due to Chinese Labor Day sales and the London Olympics.

Moving forward with the establishment of Samsung Display Corporation, the company will continue to enhance profitability by expanding sales of premium panel products such 3D, large size and LED panels, while smartphone demand is expected to continue to fuel OLED panel sales.

Profits Propped Up by Strong Sales of Smart Devices

The IT & Mobile Communications division – including Mobile Communications, Telecommunication Systems, IT Solutions and Digital Imaging – registered quarterly operating profits of 4.27 trillion won for the first period. Revenue reached 23.22 trillion won, and the mobile unit accounted for 18.90 trillion won, up 86 percent year-on-year.

Growth in shipments of Samsung’s flagship GALAXY Note and GALAXY S II and other premium mobile devices yielded high returns, with significant growth in China, Central and South America, the Middle East and Africa.

Samsung is expected to continue its strong growth momentum in the second quarter, following the announcement of the next GALAXY device in London on May 3.

The Telecommunication Systems business saw growth both in revenue and operating gains due to an increase in LTE (Long Term Evolution) wireless broadband technology equipment. In the case of IT Solutions, a boost in sales of mid-to-high-end products, including PCs and printers improved quarter-on-quarter earnings.

We expect to further solidify our leading position in LTE business in the US market and make further inroads into countries newly adopting the service.

Premium TV Sales Lift Profitability

Samsung’s Consumer Electronics businesses, which encompass Visual Display and Digital Appliances, registered an operating profit of 530 billion won in the quarter, up 550 percent year-on-year, on revenues of 10.67 trillion won.

Although weak seasonality led to a quarter-on-quarter dip in revenue, strong sales of premium TVs in developed markets and LED TVs in emerging markets saw shipments outstrip market growth and drive a sharp increase in profitability. Highlights for the quarter included an increase in sales of more than 50 percent for Samsung’s flagship 7000/8000 TV series on-year, while the Digital Appliances Business improved profitability, both on-year and on-quarter, by increasing its portion of premium product sales.

In the second quarter, market growth for flat panel TVs in the mid-single digits is expected on rising demand in emerging markets and increased sales of LED TVs which are forecast to account for over 60 percent of the TV market in the quarter. In emerging markets, Samsung aims to expand its presence with region-specific LED TV models, while its range of Smart TV models with enhanced features will continue to maintain the company’s leadership in developed markets.

As for digital appliances, demand is expected to rise led by growth in emerging markets. Samsung will aim to improve profitability in the quarter by enhancing R&D efficiencies, expanding sales of premium products and sales in emerging markets, and capitalizing on strong seasonal demand for air conditioners.
News Source: Samsung Electronics

Chris Chavez
I've been obsessed with consumer technology for about as long as I can remember, be it video games, photography, or mobile devices. If you can plug it in, I have to own it. Preparing for the day when Android finally becomes self-aware and I get to welcome our new robot overlords.

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  1. Maybe now they can afford an LTE radio.

  2. If reports are true that the Galaxy S3 American version will not have quad core exynos then its a big mistake on Samsung part don’t get me wrong the new snapdragon s4 is really good I would rather have Exynos I hope its not true if it is I’ll skip & some customers would just get the HTC One X which is already out don’t have to wait for month or more for Samsung S3

    1. there’s a key on your keyboard with a little dot on it. you should use it more often.

    2. At this point its not even about how much cores your SOC has or how much ghz, its about the end user experience. HTC can have a hexa core with like 2 ghz but it still doesn’t change the fact that most of their customers aren’t satisfied with their devices. Im not saying Samsung devices are perfect, they have their faults also but at the end of the day their devices are just more user friendly. Benchmarks don’t even mean much anymore, for instance if you take a galaxy s2 on ICS and do a browser test vs a HTC one x, their about equal in terms of speed yet the HTC one x wins in benchmarks. 

      1. I own a 13 month old HTC and I’m TOTALLY satisfied. Nothing has come along since that makes me feel the need to “upgrade”. My phone is has no lag and is snappy in every thing I do.

        IMHO: ALL Android smartphones are equally “user friendly” because anyone can install any launcher and apps and have the same user experience as long as the processor can keep up. At this point, as long as the user has a relatively newer phone, the only thing REALLY differentiating the user experience is the screen size and LTE, the rest is FULLY customizable by the user. People put WAY TOO MUCH hype into ANY new phone. It really comes down to the human psychological need to have the “latest and greatest” and the MFGs know this and advertise accordingly to take advantage of it.

        Here is the REAL truth: Smartphone users have MANY choices that can be placed in 2 categories.
        1) iPhone: 1 choice, 1 screen size, 1 layout, limited providers, limited to what Apple wants you to have.
        2) Android: Multiple MFGs, Multiple screen sizes, Multiple layout options, with ANY provider.

        If you’re not tech oriented either choice can be a satisfying experience. If you are tech oriented then there’s only 1 option. MFG choice is just a preference.

        Just my $.02.

    3. Well if you want LTE in it you have to settle for the s4 chip which is pretty good too, the htc one x in the US is also carrying a s4 chip, so i guess you my friend if you live here in the US then you are out of luck.

  3. They better not copy Apple’s 4S stunt and release the same device with updated specs.

    1. Everyone copies Apple. Everyone. 

      1. Even your haircut is copying apple

        1. Nah, bro. That shiznits patented. O_o

      2. Right? Android copied that kickass iOS notification bar. Wait………

        1. Was talking more about their business model and how they operate.

          The whole world watches Apple and tries to imitate their success. They want billions upon billions of dollars and legions of followers too. =p

          1.  Many would envy their success but few actually copy their business model.  I don’t think you’ll find any other tech company that can place such high margins on their products.

            Take Google and Facebook, they have completely different business models, profiting from advertising rather than product sales, they still have billions of dollars

      3. I have come to realize that too, this morning i took a bite out of an apple and realized it looked like their logo, its a good thing none of their employs were around or i would of been drowned in lawsuits. 

  4. 98% increase in profit! Suck on that, Apple, with your measly 94%! :D

  5. They seem really confident about their Galaxy S3.

  6. Yep! I really don’t know what made people think it would be called anything other than the Galaxy S3. I am really, really looking forward to this. I currently use the Samsung Droid Charge, which is pretty much the equivalent Galaxy S1, so the S3 will be a really big jump for me!!! 6 days to go!!!!!!

    1. I was really hoping they’d drop the “S” (why keep it?) and just go with Galaxy III. 

      1. Unless there is a major rebranding happening, I don’t see them dropping “S”. Didn’t they just announced the Y, M, S, naming convention last year?

  7. Still not quite as profitable as Apple:

    “CUPERTINO, California—April 24, 2012—Apple® today announced financial
    results for its fiscal 2012 second quarter ended March 31, 2012. The
    Company posted quarterly revenue of $39.2 billion and quarterly net
    profit of $11.6 billion, or $12.30 per diluted share. These results
    compare to revenue of $24.7 billion and net profit of $6.0 billion, or
    $6.40 per diluted share, in the year-ago quarter. Gross margin was 47.4
    percent compared to 41.4 percent in the year-ago quarter. International
    sales accounted for 64 percent of the quarter’s revenue.

    The Company sold 35.1 million iPhones in the quarter, representing 88
    percent unit growth over the year-ago quarter. Apple sold 11.8 million
    iPads during the quarter, a 151 percent unit increase over the year-ago

    1. It’s hard to beat Apple’s profits when they offer so many products with older hardware. 

      It’s like Nintendo with their consoles/handhelds. Older, cheaper tech = more profit. 

    2. iSheep makes apple FAT with CASH !!!

    3. At what point does a company say we have enough cash? At some point you’re REALLY just stealing from either your customers or your employees.

    4.  As a consumer this highlights what a bad decision it is to buy Apple, why would you want to buy a product with such a high profit margin? ~35% profit on almost everything they sell compared to Samsung and ~15%. 

      the answer, marketing and public perception.  if you price a product high many will often assume it is a superior product. for enthusiasts who understand the technology seeing through the marketing hype is easy but the average consumer is like a magpie, shiny and expensive = best.

    5. Gotta love all those people who were suckered in by a beta product called Siri.

    6. Thing is, it is a breath of fresh air to actually see another electronics company besides Apple, Inc. mention the word “record-breaking” on their financial report…

  8. You got much profits, you  got many savings. Please reduce price while keep the specs awesome. Thank you Samsung. Love Galaxy Note.

  9. Is there even any device in the US that runs an Exynos processor?

    1. sgII….on every carrier…..other than vzw which got the nexus on exclusive. dumb ass

      1. Actually according to the Wiki…
        “1.2 GHz dual-core ARM Cortex-A9[1] SoC processor; Samsung Exynos (GT-I9100)(under AT&T, Sprint, and outside US models); Texas Instruments OMAP4430 (GT-I9100G)”

        “1.5 GHz dual core Qualcomm Snapdragon S3 (T-Mobile Model / SGSII LTE & HD LTE Model & Rogers Model)”

        And the Galaxy Notes ended up being S3 on both ATT & TMo…

    2. Only the Epic 4G Touch on Sprint and original SGS2 on AT&T (no LTE). Everything else is running on a dual-core Snap. 

      1. Oh I see, I knew it wasn’t a very popular SoC here. 

        I see them mention LTE in the press release (with is tl;dr), but is this new Exynos LTE compatible? If it is not, there is no way they will bother bringing it to the US. And this will give much credence to the new rumors swirling around about Qualcomm taking over the SGS3.

  10. Meh, the T-Mobile version will probably be released with Gingerbread and no promised upgrade path to ICS…:-)

  11. woi its the wrong picture. change it please.

  12. this shows one of my main issues with Apple and why i prefer the likes of Samsung, Apple turnover $35 billion and take $12 billion profit ~35% margin, Samsung turnover $40billion and take $5 billion profit ~ 15% margin.

    I will never understand why so many fanbois shout so loudly when Apple makes it ridiculous profits, if they were share holders it would make sense but most are not.

    well done Samsung, the S3 will be my next phone :D

  13. Still laughing at all the tin foil hats that swore Samsung was dropping Android.  And Samsung is laughing all the way to the bank.

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