Samsung Electronics Co. Ltd. announced its fourth quarter financial results, reporting record high operating profits of KRW 15.15 trillion ($14.2 billion) on revenue of KRW 65.98 trillion ($62.02 billion).
Samsung’s strong fourth quarter results were driven by its components business, with main contributions coming from the memory business that manufactures DRAM and NAND. The segment reported revenue of KRW 21.11 trillion ($19.8 billion). Demand was strongly driven by the increase in mobile devices and data center, which require high performance chips.
Although memory chips showed strong growth, Samsung forecasts DRAM and NAND sales to slow down due to seasonal outlooks.
Samsung’s Display Panel segment posted KRW 11.18 trillion ($10.5 billion) in consolidated revenue. Despite decrease revenue from LCD panels, overall growth still continued driven by shipments of OLED panels. In 2018, OLED is expected to become the mainstream panel in the smartphone market, possibly leading to stronger growth for this segment.
IT & Mobile Communications Division posted KRW 25.47 trillion ($23.9 billion) in consolidated revenue. Although smartphone shipments declined in the previous quarter, sales of flagship models such as the Galaxy Note 8 increased. Samsung sales sales declined due to higher marketing costs.
Samsung forecasts smartphone demand to rise due to replacement demand for premium smartphones. The mobile segment growth is also forecasted to grow due to increases sales of flagship products with the launch of the Galaxy S9.
Overall, for the full year, Samsung reported revenue of KRW 239.58 trillion ($225.2 billion) and full-year operating profit of KRW 53.65 trillion ($50.4 billion).
Samsung announced on Wednesday a 50:1 stock split along with its financial results. The Board of Directors approved the split as another step to enhance shareholder value.
Samsung says it had received numerous requests for a stock split saying that the base price of shares was too high for investors. Requests for the split increased as the stock price rose in 2017.
Samsung’s Board believes that the stock split will “make investing in Samsung Electronics more accessible and provide dividends to a wider range of investors from 2018.”
Samsung expects the split to add both liquidity and marketability to the company’s stock, potentially enhancing corporate value.
“Our management and Board will work tirelessly to make the Company more competitive and profitable, and we remain committed to increasing shareholder value through enhancing shareholder returns.” said Samsung.