Samsung’s Q4 profit jumps 26.4% YoY, despite weaker smartphone sales

South Korean tech giant Samsung today announced its financial results for the fourth quarter of 2020. It posted KRW 61.55 trillion ($55.3 billion) in consolidated revenue and KRW 9.05 trillion ($8.1 billion) in operating profit during the fourth quarter of the year. While the company’s profit grew 26.4% over the same period a year earlier, it fell 26.7% from the previous quarter due to slow sales of consumer products, higher marketing costs, and weaker memory prices.

Due to a decline in chip prices, Samsung’s memory business witnessed a decline in earnings – despite solid shipments. The company’s System LSI and Foundry businesses were hit by the ongoing strength in the won. Thanks to a significant increase in mobile display production and higher demand for large panels, the Display Panel business achieved strong growth both QoQ and YoY.

Samsung’s IT & Mobile Communications division saw both revenue and profits fall over the previous quarter, despite increased market demand during the quarter. Samsung attributes this to “intensifying competition” and higher marketing costs. Samsung expects market demand for phones and tablets to decline amid weak seasonality. However, it believes the launch of the Galaxy S21 series and product mix improvement will help increase revenue and profit for the mobile business in the January-March period. Samsung has also confirmed that it plans to expand the foldable category in 2021 with new Galaxy Z Fold and Galaxy Z Flip models.

Samsung’s Visual Display unit, which is part of the Consumer Electronics division, also saw its earnings decrease over the previous quarter due to increased competition and rising costs. Sales, however, continued to remain strong.

Samsung has predicted a decline in overall profit in the first quarter of 2021, mainly due to the strong won and costs associated with new production lines.