Samsung Electronics reports 72% profit slump

Apr 24, 2009
Samsung Electronics, the world's top computer memory chipmaker, has announced its first-quarter net profit fell more than 70 percent year-on-year as poor demand depressed prices.

South Korea's Samsung Electronics, the world's top computer memory chipmaker, has announced its first-quarter net profit fell 72 percent year-on-year as poor demand depressed prices.

Net profit for January-March was 619 billion won (462.6 million dollars) compared to 2.19 trillion won a year earlier, the company said in a statement.

Sales rose 8.5 percent to 18.57 trillion won over the period, while year-on-year fell to 148 billion won from 2.15 trillion.

The quarterly result was still better than analysts had expected and compares with a 20 billion won loss in the last quarter of 2008 -- the company's first-ever .

"Despite the extremely challenging market environment, Samsung made a strong recovery from the fourth quarter of 2008, supported by stabilising semiconductor prices, increased profit margin for mobile phones and careful control of marketing and other expenditure," the firm said in a statement.

Vice-president Robert Yi said that "lingering uncertainty means it is difficult to predict a sharp improvement in demand or the business environment in the near term."

Yi added that , flagship of the country's biggest business group, would focus on improving technology and high-end products and strengthening management of its global supply chain.

The chip divisions recorded a quarterly operating loss of 670 billion won on weak demand and seasonal factors. Samsung said demand would improve slightly in the second quarter but oversupply would prevent any meaningful improvement in prices.

The LCD (liquid crystal display) division recorded an operating loss of 310 billion won but Samsung said it outperformed the broader market thanks to increased sales of large panels.

It said it was pushing to boost sales of premium products to China, where the market remains relatively strong.

The telecommunications divisions rebounded in the first quarter to record an operating profit of 1.12 trillion won on a consolidated basis. Samsung said it maintained unit sales despite a shrinking in the overall market.

It said overall demand would stay weak in the second quarter but the market for smartphones, touch-screen mobiles and 3G devices would slightly improve.

The company's digital media divisions registered an improved operating profit of 380 billion won in the first quarter as sales of premium products rose and marketing costs were controlled.

Samsung said its new range of large-screen LED (liquid electronic display) TVs introduced in the first quarter was well received.

"Samsung will likely post profits even in its semiconductor and LCD panel operations from the second quarter," Koo Ja-Woo at Kyobo Securities told Dow Jones Newswires.

"This is likely to help Samsung expand overall profits in the second quarter."

(c) 2009 AFP

Explore further: Struggling BlackBerry announces new round of layoffs

Related Stories

Mobile phone sales up six pct in 2008, 4th qtr weak

Mar 03, 2009

Mobile phone sales grew by six percent in 2008 over the previous year but fell nearly five percent in the fourth quarter as the global economy weakened, market research firm Gartner said on Tuesday.

'Collapse' in semiconductor demand hits ASML

Apr 15, 2009

Dutch computer chip equipment maker ASML on Wednesday announced net losses for the first quarter after a collapse in sales, but said it saw signs of improving market conditions.

Taiwan's HTC says profit down 30 percent

Apr 06, 2009

Taiwan's smartphone maker HTC Corp posted a year-on-year 30 percent fall in first quarter net profit as the global economic meltdown hit sales, the company said Monday.

SAMSUNG Electronics Regains No. 1 Spot in LCD Market

Dec 20, 2004

Samsung Electronics regained the No. 1 position in the global liquid crystal display (LCD) market last month from LG.Philips LCD, according to the Texas-based display market research firm, DisplaySearch. The electronics gian ...

World semiconductor sales up 5 percent

Nov 01, 2005

World semiconductor sales grew more than 5 percent in September as demand remained robust and driven by brisk markets for cell phones and personal computers.

Recommended for you

Yik Yak's frat-bro founders shrug off growing pains

5 hours ago

The most popular post of all time on Yik Yak is a dirty joke. Less than 2 years old, the Atlanta-based social network is geared mostly toward college students who access and post unsigned announcements through an app on their ...

Uber drivers fined in Hungary

May 24, 2015

The Hungarian tax authority fined Uber drivers in its first probe against the ride-sharing service which the economy ministry said Saturday "ignores passenger safety" and must be made to follow regulations.

Domino's taking orders via tweet

May 22, 2015

Domino's on Wednesday launched perhaps the easiest way to satisfy a pizza craving this side of mind reading: order by tweet.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.