Samsung Electronics unveils huge fourth-quarter operating profits

• Samsung Electronics announced record operating profits of KRW 15.15 trillion won ($14.24 billion) in the fourth-quarter and KRW 53.65 trillion ($50.3 billion) for the year.
• Fourth-quarter profits were driven by the company's components business.
• The announcement of a 50:1 stock split was followed by a sharp increase in stock price.

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Samsung Electronics announced record operating profits of KRW 15.15 trillion won ($14.24 billion) in the fourth-quarter and KRW 53.65 trillion ($50.3 billion) for the year.

Fourth-quarter profits were driven by the company's components business.

The announcement of a 50:1 stock split was followed by a sharp increase in stock price.

Samsung Electronics announced its 2017 fourth-quarter profits today and they were huge. In fact, the company broke its record for a single quarter by posting profits of around $14.24 billion. This was a record that had only been set the previous quarter when they recorded an operating profit of around $13 billion.

The company broke its record for a single quarter by posting profits of around $14.24 billion

The news came shortly after an announcement that the company's board of directors had approved a 50:1 stock split that saw shares in Samsung Electronics jump in value. The company claimed that the stock split had been announced due to the fact that the existing high stock price was a "hindrance to potential investors" after the price of shares in Samsung electronics rose in 2017.

All in all, today's news put the finishing touches on what had already been an incredible 2017 for the Korean company.

While best known for consumer electronics, the main driving force behind company's record fourth-quarter earnings came from its components business. Here, demand for high-performance memory products such as Samsung's DRAM and NAND meant that sales were high.

As well as this, demand for Samsung manufactured OLED screens for smartphones was high, although they said that compared to the previous quarter profitability for LCD panels had decreased.

The main driving force behind company's record fourth-quarter earnings came from its components business

Of course, keeping up profits like this is going to be hard and there are several challenges facing the company over the next year.

Firstly, in terms of smartphones, Samsung's market share could be set to fall. While its high-end phones like the S8 and Note 8 were incredibly successful in 2017, the company saw increased competition in the mid-range market, especially from Chinese brands like Huawei and Xiaomi. In fact, this recently lead market research company Canalys to claim that Samsung was no longer the top phone seller in India.

The company is expected to face challenges in its semiconductor business due to a predicted weakening in the price of its NAND flash and DRAM memory.

However, this hasn't stopped anticipation for the upcoming Galaxy S9 building as the announcement date for the phone gets closer. Recently leaked details suggest the phone could have an unlock feature that combines an iris scanner and face recognition technology and that its camera could be one of the first to have variable aperture.

While 2017 was undoubtedly great for Samsung, do you think they can keep it up in 2018?

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