Business

SEOUL — Samsung Electronics expects operating profits for the fourth quarter to soar 52.5 per cent, the South Korean tech giant said in a statement on Friday.

The company attributed the projection to record sales.

The world's biggest smartphone maker forecast 2021 fourth-quarter operating profits at around 13.8 trillion won ($11.5 billion), up from 9.05 trillion won in the same quarter last year.

The firm was boosted by record sales in the quarter, estimated at 76 trillion won, up 23.5 per cent on-year, according to the statement, which added that the forecast reflected a one-time bonus payment to employees.

A spokeswoman said annual sales in 2021 were also expected to be the highest ever.

The operating profit estimate was below analysts' estimate of 15.2 trillion won, according to Bloomberg News.

"A continued price growth in memory chips that ran three consecutive quarters until October last year has boosted Samsung's profit margins," said Park Sung-soon, an analyst at Cape Investment & Securities.

"The most significant source of income for Samsung lies in the memory chip business."

Samsung Electronics did not provide details Friday on the performance of its various divisions. The firm is expected to release its full results on January 27.

Analysts and investors are also keeping an eye on the impact of the citywide COVID lockdown in Xi'an, China, which is home to a Samsung semiconductor plant.

Samsung said last week that it had to "temporarily adjust operations" at the Xi'an facilities, without detailing how that would impact production.

Pandemic boom 

While the coronavirus pandemic has wreaked havoc on the world economy, it has helped many tech companies boom.

Pandemic-driven working from home has boosted demand for devices powered by Samsung's chips, as well as home appliances such as televisions and washing machines.

Analysts had also expected the firm to benefit from the traditionally lucrative holiday season.

The world's biggest memory chip maker, Samsung Electronics has aggressively stepped up investment in its semiconductor business as the world battles chip shortages that have hit everything from cars and home appliances to smartphones and gaming consoles.

In November, it announced a new microchip factory in Texas, a $17 billion investment. The plant is expected to be operational by the end of 2024.

It joined rivals TSMC from Taiwan and US firm Intel in expanding chip manufacturing capacity in the United States, which sees the sector as an area of strategic competition with China.

The firm is also investing in the development of advanced technologies such as artificial intelligence, robotics and 5G/6G communications.

Samsung Electronics is the flagship subsidiary of the giant Samsung group, by far the largest of the family-controlled empires known as chaebols that dominate business in South Korea.

The conglomerate's overall turnover is equivalent to around one-fifth of South Korea's gross domestic product.

Bloomberg News contributed to this story 

PARIS — French regulators have hit Google and Facebook with 210 million euros ($237 million) in fines over their use of "cookies", the data used to track users online, authorities said on Thursday.

The 150-million-euro fine imposed on Google was a record by France's National Commission for Information Technology and Freedom (CNIL), beating a previous cookie-related fine of 100 million euros against the company in December 2020.

Facebook was handed a 60-million-euro fine.

"CNIL has determined that the sites facebook.com, google.fr and youtube.com do not allow users to refuse the use of cookies as simply as to accept them," the regulatory body said.

The two platforms have three months to adapt their practices, after which France will impose fines of 100,000 euros per day, CNIL added.

Google said it would change its practices following the ruling.

"In accordance with the expectations of internet users... we are committed to implementing new changes, as well as to working actively with CNIL in response to its decision," the US firm said in a statement. 

Cookies are little packets of data that are set up on a user's computer when they visit a website, allowing web browsers to save information about their session.

They are highly valuable for Google and Facebook as ways to personalise advertising -- their primary source of revenue. 

But privacy advocates have long pushed back and a European Union law passed in 2018 placed strict rules on internet companies, obliging them to seek the direct consent of users before installing cookies on their computers.

LONDON/ TOKYO — European equities sank on Thursday after the Federal Reserve signalled it was ready to hike interest rates sooner than expected to combat elevated inflation, sparking a global selloff.

London's benchmark FTSE 100 index slid 1.0 per cent to 7,445.04 points, after heavy losses earlier in Asia and overnight on Wall Street.

In the eurozone, Frankfurt's DAX index also shed 1.0 per cent to 16,111.16 points and the Paris CAC 40 lost 1.3 per cent to 7,283.62.

"The selloff for the European markets continues as every single sector is in red," said AvaTrade analyst Naeem Aslam.

"Everyone is concerned about the Fed's fast and furious monetary policy stance."

 Tokyo stocks plunged more than 2.8 per cent on Thursday over rekindled speculation that the US Federal Reserve may start tightening monetary policy sooner than expected.

The benchmark Nikkei 225 index gave up 2.88 per cent, or 844.29 points, at 28,487.87, while the broader Topix index lost 2.07 per cent, or 42.26 points, to 1,997.01.

The dollar stood at 115.85 yen, off from 116.04 yen in New York late Wednesday.

Japanese shares began the day with falls "after US shares dropped following minutes of the FOMC (Federal Open Market Committee) meeting that prompted expectations the Fed will accelerate the normalisation of monetary policy," senior market analyst Toshiyuki Kanayama of Monex said.

Among major Tokyo shares, Uniqlo operator Fast Retailing fell 4.89 per cent to 60,880 yen after the firm reported falling December sales due to warm weather. 

Sony Group plunged 6.89 per cent to 14,455 yen after two days of rallies, and after it announced on Wednesday it would explore entering the rapidly growing electric vehicle market.

Toyota gave up earlier gains and ended down 0.33 per cent at 2,284.5 yen, as did Honda, which fell 0.23 per cent to 3,408 yen.

High-tech investor SoftBank Group lost 0.89 per cent at 5,372 yen, and chip-testing equipment maker Advantest dropped 4.43 per cent at 10,780 yen.

The Fed signalled a more aggressive rate-tightening path than previously flagged, with officials arguing "it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated." The much-anticipated release of minutes from the US central bank's December policy meeting showed that while officials were concerned about the fast-spreading Omicron coronavirus variant, they were also confident the world's top economy was in good shape and able to absorb high borrowing costs.

"Last night's Fed fallout continues to reverberate," added CMC Markets analyst Michael Hewson.

"What appears to have spooked markets is talk about balance sheet reduction, and it is this that has prompted a quite a bit of anxiety with some (Fed officials) talking about the probability of when it might be appropriate to reduce the size of the balance sheet, thus pulling liquidity out of the market.

"This appears to have caught markets off guard, prompting concerns over tighter liquidity conditions," cautioned Hewson.

NEW YORK — Nostalgic for those mobile phones with a physical keyboard? Brace yourself, because as of Tuesday many models of the once-indispensable BlackBerry devices will no longer work.

The Canadian company has decided to pull the plug on new updates of its operating system, meaning most BlackBerries that became synonymous with the emerging mobile digital culture of recent decades — and were embraced by politicians and business executives — will not operate correctly after January 4.

"As of this date, devices running these legacy services and software through either carrier or Wi-Fi connections will no longer reliably function, including for data, phone calls, SMS and 9-1-1 [emergency] functionality," the company said on its website last month.

The "end-of-life" (EOL) move, as Blackberry called it, impacts BlackBerry 7.1 OS and earlier, BlackBerry 10 software, BlackBerry PlayBook OS 2.1 and earlier versions. 

The company did say, however, that devices using Google's Android operating system, including the BlackBerry KEY2 released in 2018 and designed by China's TCL Group, would not be affected by the changes.

The EOL decision marks the end of an era in mobile telephony, which reached its peak in the late 2000s when BlackBerry met with widespread commercial success, especially among professionals.

The large QWERTY keyboard for easier emailing and the simple, uncluttered design were favoured by business leaders, celebrities, politicians and journalists.

Former US president Barack Obama was famously addicted to his BlackBerry and insisted on keeping his phone in the White House after his election in 2008, forcing his security detail to build him a custom model reduced to basic features to keep his data safe.

BlackBerries were ultimately supplanted by smartphones, notably beginning with Apple's iPhone, which launched in 2009.

Attempts to relaunch BlackBerry fizzled, and its partnership with TCL for the KEY2, the latest model, was not renewed.

Since 2013, the firm based in Waterloo, Ontario and formerly named Research In Motion has focused on software development and production.

LONDON — Europe's major stock markets advanced on Wednesday as investors drew strength from easing Omicron virus concerns and shrugged off a mixed performance on Wall Street and in Asia.

US stocks were mixed in early trading as traders awaited the minutes of the latest Federal Reserve meeting that could signal when the central bank is likely to hike interest rates.

Traders have grown wary of the Fed, which has indicated it may hike rates repeatedly next year to curb inflation, potentially dampening the US stock rally enjoyed throughout the COVID-19 pandemic.

London firmed 0.1 per cent, while Frankfurt jumped 0.7 per cent to come within a whisker of its all-time high, and Paris won 0.8 per cent as it pushed further into record territory.

On Wall Street, the Dow continued to climb from its record closing high at the opening bell on Wednesday, but both the S&P 500 and the tech-heavy Nasdaq Composite moved further lower.

Markets wavered in Asia after a tepid overnight Wall Street lead, with inflation and expected interest rate hikes returning to the fore as Omicron fears ease.

In foreign exchange, the dollar slid versus the euro before minutes from the US Federal Reserve's latest interest rate meeting.

Oil rose further after climbing on Tuesday, when the Organisation of the Petroleum exporting Countries and its allies agreed as expected to raise output by 400,000 barrels per day in February.

"Overall, risk appetite remains positive," said ThinkMarkets analyst Fawad Razaqzada.

"The biggest driver behind this is relief that Omicron is not as deadly as Delta, which is fuelling expectations that travel restrictions and lockdowns will be lifted soon."

Omicron relief rally 

While the new COVID variant continues to spread rapidly around the world, forcing governments to maintain containment measures, its apparently milder symptoms have also allowed traders to focus more on future economic policies and plans to rein in surging prices.

China tech sector weighs 

Chinese technology firms, which have been hit by a crackdown from China's government, were a big drag on Hong Kong as it sank more than one per cent.

Concerns about a new COVID outbreak in the city that has led to the reimposition of containment measures added to the glum mood.

Shanghai stocks also slid but Tokyo clung onto positive territory.

In company news, China Mobile briefly soared around 10 per cent on its debut in Shanghai after the telecoms giant was delisted in New York under a standoff between Beijing and Washington. It ended only slightly higher, however.

The share offer is expected to raise $8.8 billion after the company exercises an over-allotment option, according to Bloomberg News, making it the largest on China's domestic stock markets for more than a decade.

NEW YORK — Japanese carmaker Toyota led US automobile sales in 2021, according to figures released on Tuesday, overtaking General Motors (GM) for the first time as a shortage of semiconductors roils the car industry.

The shift atop the rankings came after a year in which assembly lines were plagued by scarcity of the crucial computer chips, resulting in steep fourth-quarter sales declines for both companies.

But Toyota still managed to grow annual sales in the United States by 10.4 per cent to 2.3 million, while General Motors suffered a 12.9 per cent drop to 2.2 million.

Toyota, which has been credited with better management of the chip issue compared with some rivals, saw small annual gains for two top-selling sedans, the Camry and the Corolla, and a modest dip in sales of its Rav4 compact SUV. Its full-sized Highlander SUV scored higher sales in 2021.

GM, which relies more heavily on trucks than Toyota, saw an annual 10.8 per cent drop in its Silverado pickup trucks and a 6.4 per cent fall in its GMC truck line.

GM has held the crown as the number-one company in US auto sales since 1931, when it supplanted Ford, according to trade publication Automotive News.

Charlie Chesbrough, senior economist at Cox Automotive, noted that GMs' de-emphasis of sedans has cost it some market share, and characterized Toyota's ascendance as a "significant event" given GM's longtime leadership.

In a market starved of inventory, Toyota also may have benefitted from a smaller dealer network compared with GM, Ford and Stellantis, which owns the Chrysler brands, he said.

"The larger dealer networks of GM/Ford/Stellantis may have faced a greater challenge of keeping the right product in the right market for the right buyer," Chesbrough said in an email. "And, as a result, sales may have been trimmed because buyers couldn't find the product they wanted." 

Semiconductor struggle 

Cox has projected 2021 US sales of 14.9 million, up 2.5 per cent from the 2020 level but much below the five-year average. The consultancy has pointed to strong demand but anemic inventories, saying "demand is healthy but... you can't sell what you don't have".

A shortage in semiconductors has been one of the emblematic supply chain problems of the COVID-19 pandemic.

Analysts have cited outsized demand for electronics as a factor, but automakers have also seen supplies of the component affected by closures at factories in Asia due to COVID lockdowns or fires at manufacturing sites. 

Among other companies reporting sales, Honda scored an 8.9 per cent rise in US sales last year to 1.5 million vehicles, and Hyundai won a 19 per cent increase to 738,081 autos.

While GM has acknowledged that low car inventories are a problem, Chief Executive Mary Barra and other executives have touted strong vehicle pricing, which has enabled it to remain profitable even as sales sag. 

GM's inventories recovered somewhat during the quarter, finishing December at just under 200,000. That is about 55 per cent more than three months earlier, but less than half the level of a year ago.

"The key constraint for sales continues to be reduced inventory levels as a result of the semiconductor shortage. Those inventory levels are beginning to recover," said GM Chief Economist Elaine Buckberg.

"Consumers want to drive as much as before the pandemic, based on recent high levels of vehicle usage. High vehicle usage and deferred sales mean pent-up demand for new vehicles in the millions and building. That pent-up demand will support sales as vehicle supply improves."

The final tally for 2021 comes as US auto giants double down on electric vehicle investments. On Wednesday, Barra is scheduled to deliver a virtual keynote speech at the Consumer Electronics Show to unveil an electric version of the Silverado.

In a statement, Toyota pointed to $3 billion in new US investments targeting EV development, while Ford said Tuesday it will nearly double production capacity for the electric version of its top-selling F-150 pickup truck.

LONDON — Stock markets rallied on Tuesday to fresh record highs as investors bet on reduced economic fallout from the Omicron variant, while oil prices pushed higher as OPEC and its allies raised output.

Traders kept a close watch also over high inflation concerns.

London kicked off its 2022 trading with strong gains for the travel sector that helped push the FTSE 100 above 7,500 points for the first time, while the British pound reached a near two-year high versus the euro.

"The FTSE 100 has set off on a sprint of New Year optimism, shaking off worries of inflation and concerns about the Chinese property market," noted Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

"Stocks reliant on international travel are powering ahead, with British Airways owner, International Consolidated Airlines Group, rising 7 per cent in early trade."

While COVID variant Omicron is spreading like wildfire around the world, it appears to be far less severe than initially feared, raising hopes that the pandemic could be overcome and life return to more normality.

"The biggest driver behind the stock market rally and risk appetite in general is relief that Omicron is not as deadly as Delta, which is fuelling expectations that travel restrictions and lockdowns will be lifted soon," said Fawad Razaqzada, market analyst with ThinkMarkets.

However, inflation, supply chain snags, central bank policy tightening and geopolitical woes continue to weigh on sentiment and analysts have warned that the blockbuster stock market gains seen in recent years could be tougher to attain.

Despite the strong start, "we expect 2022 to be far more challenging from an investment perspective", said Heather Wald of Bel Air Investment Advisers.

"Rarely has a market delivered three consecutive years of double-digit returns, as we have seen from 2019-2021."

European and Asian equity markets enjoyed strong gains on Tuesday, with the CAC 40 striking a new intraday records, following fresh record closes on Monday on Wall Street.

US stocks pushed further higher at the opening bell on Tuesday, with both the Dow and S&P 500 striking fresh all-time highs.

OPEC+ hikes output 

Investors were looking ahead also to Wednesday's release of minutes from the Federal Reserve's December policy meeting, hoping for insight into its plans amid surging inflation, that is forcing central banks to wind back pandemic stimulus and raise interest rates.

The Fed has already started tapering its bond-buying programme and the focus is now on what it will do with interest rates, with some commentators predicting three hikes before 2023.

Elsewhere, OPEC and its allies, as expected, maintained their practice of modestly increasing oil output every month as the rapidly spreading Omicron variant has so far not heavily hit demand.

The OPEC+ grouping, including top producers Saudi Arabia and Russia, has resisted US pressure to more widely open the taps as high energy prices are fuelling a surge in inflation across the world.

The 13 members of the OPEC cartel and their 10 allies drastically slashed output in 2020 as the pandemic wreaked havoc with demand.

Last year, they decided to step it up again gradually as prices recovered, while reviewing the situation every month.

After a short videoconference meeting on Tuesday, the group said it had agreed to raise output by 400,000 barrels per day in February, the same level as in previous months.

The club's members approved a previous hike at their December meeting despite the emergence of Omicron, which had caused prices to fall as markets fretted over its potential impact on the global economy.

The December decision earned the thanks of the White House, nervous of the effect of rising prices at American petrol stations, but it did not prevent crude prices from recovering considerably from their previous slump.

The price of Brent, Europe's benchmark oil contract, hit $79.76 at 13:25 GMT on Tuesday — 15 per cent higher than before the group's December 2 meeting.

OPEC analysts told the group on Monday that Omicron would have a moderate impact on demand and the rise in price is expected to continue in 2022.

While the new COVID variant is spreading like wildfire around the world, it appears to be far less severe than initially feared, raising hopes that the pandemic could be overcome and life return to a little more normality.

Iran exports 

While OPEC+ countries have been gradually increasing output again since last year, analysts note some countries, such as Nigeria and Angola, have been struggling to lift production.

"Important here is that Russia did not lift production in December which could be a sign that they are getting closer to their capacity," SEB chief commodities analyst Bjarne Schieldrop said.

Another heavyweight, Iran, has seen its exports limited by US sanctions.

Talks to revive a deal, which curbed Iran's nuclear activities in exchange for sanctions relief, are underway in Vienna.

They have dragged on since last year but negotiators are pushing to conclude the talks to get the 2015 landmark agreement back on track.

It was thrown into disarray in 2018 when the US withdrew from the accord.