Earnings Release

Samsung Electronics Reports First Quarter Results

Samsung Electronics reports revenue of KRW 17.11 trillion and net profit of KRW 2.19 trillion

SEOUL, Korea - April 25, 2008 : Samsung Electronics Co., Ltd., today announced revenues of 17.11 trillion Korean won (won) for the first quarter of 2008 ended March 31, 2008. Operating profit and net income for the quarter were 2.15 trillion won and 2.19 trillion won on a parent basis. Operating profit on a consolidated basis reached 2.57 trillion won.

In addition to first quarter earnings, Samsung also announced its capital expenditure plan for calendar year 2008. On a consolidated basis, capital expenditures will reach more than 11 trillion won this year, comprised of approximately 7.0 trillion won for the company's memory business, and approximately 3.7 trillion won for the LCD Business.

Robust Performance in Telecommunication

The Telecommunication Business posted record-high quarterly revenues of 5.55 trillion won. Operating profit reached 920 billion won, growing 57 percent quarter on quarter, while the operating margin was 16 percent. On a consolidated basis, operating profits were 1.06 Trillion won on revenues of 6.65 Trillion won.

Sales of handsets overall achieved similar volume as last quarter's record of 46.3 million units sold, although handset markets globally contracted by about 13 percent. Reduction in marketing expenses and favorable currency exchange rates boosted first quarter results along with cost reduction efforts achieved through deployment of global SCM.

Steady Growth in LCDs

The LCD Business posted quarterly revenues of 4.34 trillion won on a parent basis. Operating profit grew 10 percent over the last quarter, reaching 1.01 trillion won with a profit margin of 23 percent. Robust sales of TV panels sized 46 inches and above, reaching more than a million units worldwide, helped to drive steady growth in LCD revenues, aided by the favorable currency exchange rate. Throughout the quarter, prices for LCD panels have not declined as significantly as expected, further contributing to the division's favorable results. Operating profit for the quarter, on a consolidated basis, reached 1.08 trillion won on revenues of 3.65 trillion won.

The LCD Business will enhance its competitive position by investing more than 3.7 trillion won in capital expenditures, as well as increasing sales of 46 inch and above TV panels and continued cost reduction efforts.

A Strategic Investment in Semiconductor

Weak prices amid weak seasonality diminished the semiconductor business unit's overall results, contributing to lower revenue and profits compared with the fourth quarter of 2007. On a parent basis, operating profit of the Semiconductor Business in the first quarter was 190 billion won on revenue of 4.39 trillion won. Factors influencing sluggish demand for the industry overall included weak seasonality, oversupply of DRAM due to steady increases in 12" capacity, and over-emphasis on high-density products. In the case of NAND flash chips, the spot price for 8Gb MLC declined approximately 35 percent from the previous quarter, reflecting oversupply and slow demand for Card, USB, and MP3P products. At the same time, System LSI continued to demonstrate growth momentum due to strong demand for DDI, Smart Card IC and CIS.

Strong Seasonal Effects in Digital Media & Digital Appliance

The Digital Media Business posted an operating profit of 30 billion won on revenue of 1.83 trillion won on a parent basis. The unit's operating profit and revenue on a consolidated basis reached approximately 210 billion won and more than 7.42 trillion won respectively. Sales of LCD TVs decreased approximately 15 percent quarter on quarter due to weak seasonal demand and severe competition. Nevertheless, Samsung expects to maintain its number one position globally in the Flat Panel TV market.

The Digital Appliance Division posted revenues of 820 billion won and continued to generate operating profits of 20 billion won. A modest increase in divisional revenues was attributed to seasonal sales of air-conditioners.

Sales & Profits
(in trillion won, parent basis)
1Q 07 2Q 07 3Q 07 4Q 07 1Q 08
Revenue 14.39 14.63 16.68 17.48 17.11
Gross Profit 3.44 3.34 4.68 4.86 4.69
  (Margin) 24% 23% 28% 28% 27%
  SG&A 2.26 2.43 2.62 3.08 2.53
Operating Profit 1.18 0.91 2.07 1.78 2.15
  (Margin) 8% 6% 12% 10% 13%
  Non-Operating Income 0.66 0.71 0.56 0.76 0.46
Pre-Tax Income 1.84 1.62 2.63 2.54 2.62
  (Margin) 13% 11% 16% 15% 15%
  Income Tax 0.24 0.20 0.44 0.33 0.43
Net Income 1.60 1.42 2.19 2.21 2.19
  (Margin) 11% 10% 13% 13% 13%
Revenue by Business
(in trillion won, parent basis)
Business 1Q 07 4Q 07 1Q 08 Growth
YoY QoQ
Semiconductor 4.48 4.91 4.39 (2%) (11%)
LCD 2.84 4.46 4.34 53% (3%)
Telecommunication 4.60 5.37 5.55 21% 3%
Digital Media 1.55 1.64 1.83 18% 12%
Digital Appliance 0.77 0.86 0.82 6% (4%)
Total Revenue 14.39 17.48 17.11 19% (2%)
Operating Profit by Business
(in trillion won, parent basis)
Business 1Q 07 4Q 07 1Q 08 Growth
YoY QoQ
Semiconductor 0.54 0.43 0.19 (64%) (55%)
LCD 0.07 0.92 1.01 1,278% 10%
Telecommunication 0.60 0.58 0.92 53% 57%
Digital Media (0.04) (0.13) 0.03 - -
Digital Appliance 0.00 (0.03) 0.02 - -
Total Operating Profit 1.18 1.78 2.15 82% 21%
Consolidated basis Revenue by Business
(in trillion won)
Business 1Q 07 4Q 07 1Q 08
Semiconductor 4.98 5.35 4.87
LCD 2.27 4.16 3.65
Telecommunication 5.41 6.62 6.65
Digital Media 5.51 8.68 7.42
Digital Appliance 1.54 1.69 1.83

* The consolidated sales figures are net sales (They exclude inter-segment sales)
Including intersegment sales, consolidated sales for 1Q'08 : Semiconductor - 5.33 trillion won, LCD - 5.15 trillion won

Consolidated basis Operating Profit by Business
(in trillion won)
Business 1Q 07 4Q 07 1Q 08
Semiconductor 0.63 0.52 0.20
LCD 0.11 0.97 1.08
Telecommunication 0.77 0.63 1.06
Digital Media 0.20 0.39 0.21
Digital Appliance 0.03 0.01 0.03
About Samsung Electronics

Samsung Electronics Co., Ltd. is a global leader in semiconductor, telecommunication, digital media and digital convergence technologies with 2010 consolidated sales of US$135.8 billion. Employing approximately 190,500 people in 206 offices across 68 countries, the company operates two separate organizations to coordinate its nine independent business units: Digital Media & Communications, comprising Visual Display, Mobile Communications, Telecommunication Systems, Digital Appliances, IT Solutions, and Digital Imaging; and Device Solutions, consisting of Memory, System LSI and LCD. Recognized for its industry-leading performance across a range of economic, environmental and social criteria, Samsung Electronics was named the world’s most sustainable technology company in the 2011 Dow Jones Sustainability Index. For more information, please visit www.samsung.com.