Seoul, Oct 16 2006 (Korea Newswire)--
Samsung Electronics Co., Ltd. today announced its financial
results for the third quarter of 2006 (ended September 30,
2006). The company posted net income of 2.19 trillion won on
revenue of 15.22 trillion won. Operating income for the
third quarter was 1.85 trillion won.
“Our strategy of producing high performance, differentiated
products into multiple end markets allowed us to power ahead
and deliver solid third quarter results amid a challenging
market environment of the information-technology sector,”
said Dr. Woosik Chu, senior vice president and head of
Samsung Electronics’ investor-relations team.
“We anticipate our key business units to experience
significant tailwinds in the fourth quarter, a seasonally
strong period. Furthermore, our plan to invest an additional
1 trillion won to increase capacity of our memory-chip
business is expected to create revenue opportunities next
year.”
Operating profit of the Semiconductor Business reached 1.27
trillion won on revenue of 4.91 trillion won in the third
quarter. Operating profit increased 29.5% in the third
quarter from the second quarter, mainly due to strong demand
of memory chips from the PC sector.
In the memory-chip business, Samsung Electronics capitalized
on the global shortage in supply of DRAM chips that
subsequently led to a surge in DRAM prices. A timely
redeployment of production from slower-growth products and
strengthening higher-growth, premium products such as DDR2,
enhanced profit margins by 3.7 percentage points from the
previous quarter.
The memory business is expected to see further growth and
higher returns in the fourth quarter, a seasonally strong
period. The price of DRAM chips is expected to remain strong
in the fourth quarter, and the demand of NAND flash memory
chips is expected to grow with the introduction of new
products that require larger memory such as MP3s, PMPs, and
handsets.
In addition, migration to the advanced process technology,
in particular 60-nanometer (nm) 8-Gigabit (Gb) NAND Flash
technology, is expected to reduce manufacturing costs and
improve profitability. Samsung Electronics’ plan to invest
an additional 1 trillion won to increase production capacity
of memory chips is expected to create revenue opportunities
next year.
The Telecommunication Network Business posted revenue of
4.71 trillion won, and operating income of 520 billion won.
In the third quarter, robust sales of the “Ultra Edition”
premium handsets in Europe helped boost sales to a record
30.7 million units and double-digit profit margins of 11.1%.
In the fourth-quarter, the pace of the demand increase is
expected to accelerate as the overall 3G market grows and
demand for replacement rises. The company expects both the
volume of sales and average sales price (ASP) to see
significant improvement with the launching of 3G “Ultra
Edition” handsets in various form factors and multimedia
handsets.
The LCD Business reported revenue and operating income of
2.996 trillion won and 160 billion won, respectively. Prices
of IT panels recovered ahead of the seasonally-robust period
and sales of 40-inch and larger TV panels remained strong.
Samsung Electronics’ ability to once again outperform an
overall weak LCD market reinforced the company’s
competitiveness in the industry.
Demand for LCD TV panels dominated the industry dynamics.
Samsung Electronics sold 3 million units of LCD TV panels,
of which sales of 40-inch and larger TV panels amounted to
1.6 million units. Samsung Electronics continues to asset
its leadership in the LCD TV panel market, which grew 37%
from the second quarter.
Samsung Electronics plans to boost monthly production
capacity of its Line 7 to an additional 150,000 units in the
fourth-quarter, a busy selling season.
Digital Media Business posted an operating loss of 100
billion won on revenue of 1.64 trillion won, on a parent
basis. However, sales of LCD TV, PDP TV and other high-end
flat-panel TV fared well, generating formidable profit for
the company.
Equity gains, which better depict the global performance of
the Digital Media Business, jumped to 540 billion won in the
third quarter from 290 billion won in the second quarter.
The majority of the equity gains were generated from strong
sales of digital media products including LCD TVs.
Sales of its Digital Appliance Business increased 7.6%
quarter-on-quarter to 830 billion won from favorable sales
of refrigerators and washing machines. Operating loss was at
14.8 billion won.
About Samsung Electronics
Samsung Electronics Co., Ltd. is a global leader in
semiconductor, telecommunication, digital media and digital
convergence technologies with 2005 parent company sales of
US$56.7 billion and net income of US$7.5 billion. Employing
approximately 128,000 people in over 120 offices in 57
countries, the company consists of five main business units:
Digital Appliance Business, Digital Media Business, LCD
Business, Semiconductor Business and Telecommunication
Network Business. Recognized as one of the fastest growing
global brands, Samsung Electronics is a leading producer of
digital TVs, memory chips, mobile phones, and TFT-LCDs. For
more information, please visit www.samsung.com. |
