Samsung Electronics announced fourth quarter and FY 2016 results. The company posted KRW 53.33 trillion ($45.6 billion) in consolidated revenue and KRW 9.22 trillion ($7.9 billion) in operating profit for the quarter.
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Overall, the company reported full-year 2016 revenue of KRW 201.87 trillion and full-year 2016 operating profit of KRW 29.24 trillion.
Fourth quarter earnings were driven by the components businesses, mainly the Memory business and the Display Panel segment, which manufactures OLED and LCD screens.
Robust sales of high-end, high-performance memory products and expanded process migration in V-NAND, plus strong shipments of OLED and large-size UHD panels contributed to profitability. The stronger US dollar against the Korean won also had a positive impact on operating profits.
The Mobile business registered gains YOY due to solid sales of flagship products such as Galaxy S7/ S7 edge and improved profitability of mid-to-low end models.
The Consumer Electronics division posted an earnings decline, despite increased sales of premium TVs including SUHD and curved TVs. The Digital Appliances business also saw positive demand in the fourth quarter, but new investments in B2B resulted in a slip in earnings.
For 2016, Samsung achieved solid results despite the Note 7 discontinuation in the second half as a result of continuous efforts during past two to three years to strengthen its component business competitiveness by focusing on value-added products and widening the technology gap in the DRAM business as well as strategic investments in V-NAND and OLED.
The company also made several key acquisitions and divestures which will enable the future growth.
In 2017, the components businesses expect solid demand for value-added semiconductor products and for flexible OLED and large-size LCD panels. The company will seek to improve profitability in DRAM and NAND amid continued growing demand for data center servers and mobile devices
System LSI will continue to diversify its customer base in order to increase earnings.
For display panels, earnings from high-end flexible OLED are expected to increase YOY due to an expansion in supply, and Samsung expects to meet stronger competition in the LCD market with value-added products focusing on UHD and large-size TV panels.
For Mobile in 2017, the company will continue to innovate both in software and hardware across its entire line-up and prioritize consumer safety. Although the growth of the global smartphone market is expected to slow this year, new services such as artificial intelligence (AI) will be a differentiating factor.
The mobile business will seek to strengthen its leadership in the premium market and boost competitiveness of mid-to-low end smartphones by adding innovative features available in high-end models. ■