The Samsung logo on its office building in Seoul, South Korea. Picture: REUTERS
The Samsung logo on its office building in Seoul, South Korea. Picture: REUTERS

Seoul — Samsung Electronics has reported a 73% jump in its fourth-quarter net profit, setting a record for any three-month period, mainly driven by demand for its memory chips and display panels.

Net profit for the October-December period hit 12.26-trillion won ($11.4bn), the South Korean tech giant said on Wednesday, on sales that rose 23.7% to 65.98-trillion won.

Samsung Electronics, the flagship subsidiary of the giant Samsung Group, has had to overcome a humiliating recall of the Galaxy Note 7 device and the jailing of its vice-chairman Lee Jae-Yong on corruption charges, but its financial performance has gone from strength to strength.

Its shares have more than doubled in the past two years thanks to its results, reaching levels of more than 2.5-million won apiece, putting them out of reach of many small investors.

The firm announced a 50-for-1 stock split, sending the shares up 6.4% in midmorning trade.

"The stock split signals Samsung will stay on its course bolstering returns to shareholders," said Cho Ik-Jae at Hi Investment and Securities.

"It will take further shareholder-friendly steps including larger dividends and buybacks," he said.

Operating profit came to 15.15-trillion won in the fourth quarter, up 64.3% from a year earlier, Samsung Electronics said, in line with the indication it issued earlier in January.

Fourth-quarter earnings were driven by the components business, with the largest contribution coming from the memory business that manufactures DRAM and NAND chips, the company said.

"Orders for high-performance memory products for servers and mobile storage were strong," it said.

The display panel business, which manufactures OLED and LCD screens, increased its shipments of OLED panels for premium smartphones.

But seasonal factors dented growth for the System LSI and Foundry businesses, it said, as well as the profitability of LCD panels.

Earnings in the mobile business also fell, due to higher marketing costs.

Operating profits were also undercut by approximately 660-billion won due to the won’s appreciation against the dollar and other major currencies, Samsung said.

For the full year, net profit was also a record, at 42.19-trillion won, up 85.6% on 2016, on sales of 239.58-trillion won.

Kim Kyung-min at Daeshin Securities said the fourth-quarter results were slightly lower than market expectations, with sales projected to be 66-trillion won and operating profit at 15.8-trillion won.

Looking ahead, Samsung said the first quarter, despite being a traditionally slow season, is expected to show strong demand for memory products used in data centres.

Analysts expect Samsung Electronics’ full-year operating profit to rise beyond 60-trillion won this year, again boosted by its semiconductor business.