Record operating profit of 4.41 trillion won on revenues of 34.64 trillion won
SEOUL, Korea - April 30, 2010 : - Samsung Electronics Co., Ltd. today announced revenues of 34.64 trillion Korean won on a consolidated basis for the first quarter ended March 31, 2010, a 21 percent increase year-on-year. For the quarter, the company posted a net profit of 3.99 trillion won.
Consolidated operating profit for the quarter was a record 4.41 trillion won, a 643 percent increase year-on-year. The figure tops the previous high of 4.22 trillion won in the third quarter 2009.
In its earnings guidance disclosed on April 6, Samsung estimated first-quarter consolidated revenues would reach approximately 34 trillion won with an operating profit of 4.3 trillion won.
As previously announced, this represents the first quarter Samsung has released figures under the International Financial Reporting Standards.
The company's strong performance in the first quarter was driven by significant improvements in the components businesses, especially semiconductors, and strong earnings in the set businesses.
Robert Yi, Vice President and head of Samsung Electronics' Investor Relations Team, said he is cautiously optimistic second-quarter earnings will improve, due to continued strong memory chip markets, favorable LCD panel demand and increased sales of set products such as mobile handsets and TVs.
"We will continue to widen the gap with competitors in the memory business, improve profitability in the LCD business, and strengthen our competiveness and market dominance in the handset and TV businesses," Yi said.
Samsung��s Semiconductor Business recorded consolidated operating profit of 1.96 trillion won in the first quarter, up from an operating loss of 710 billion won a year ago. Revenue reached 8.20 trillion won, a 57 percent increase year-on-year.
Supply constraints amid strong demand in the DRAM market led to the rise of DRAM prices, and there was a steady demand in the NAND market due to strong demand for smart phones and mobile application products.
Samsung's Semiconductor Business was able to achieve profitability by focusing on 40-nm-class process in the DRAM market and expanding 30-nm-class process in the NAND market.
In the second quarter, the demand for DRAM and NAND is expected to rise amid steady PC shipment growth and increased demand for mobile products including Tablet PCs.
Samsung's Semiconductor Business will focus on widening its gap with competitors by accelerating 40-nm-class process migration in the DRAM market and 30-nm-class based NAND products.
The LCD Business recorded an operating profit of 490 billion won on revenue of 6.85 trillion won, up 40 percent year-on-year. Despite traditionally weak seasonality, shipments increased significantly from a year ago.
Samsung plans to enhance profitability by expanding sales of differentiated products in the second quarter, including LED, 3D, 240Hz and Slim TV panels.
The company expects second-quarter demand to remain stable due to international events including the World Cup.
The Telecommunication businesses - including mobile handsets and telecommunication networks - posted an operating profit of 1.10 trillion won on revenue of 9.18 trillion won. The operating profit margin was 12 percent.
Strengthened premium product lineup and growth in emerging markets including India and CIS countries enabled Samsung to ship 64.3 million mobile handsets and outperform the market.
In the second quarter, the Mobile Communications Business plan to launch strategic smart phones including Android-powered models and its proprietary bada-based smart phones, expand its touch-phone line-up, and strengthen emerging market distribution channels. Demand is expected to increase slightly in the second quarter due to economic recovery.
Samsung's Digital Media businesses - including Visual Display and Digital Appliances - posted an operating profit of 520 billion won on revenue of 12.61 trillion won.
In flat panel TVs, Samsung recorded shipments of 8.4 million units, thanks to the successful launch of 3D TVs in the global market and the strong penetration of LED TVs in developing markets.
Digital Appliance sales rose 21 percent from last year as a result of demand recovery and strong sales of premium refrigerators and drum washing machines.
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.