Consolidated Revenues of 28.67 trillion won, Operating Profit of 470 billion won
SEOUL, Korea - April 24, 2009: Samsung Electronics Co., Ltd. today announced revenues of 28.67 trillion Korean won on a consolidated basis for the first quarter ended March 31, 2009, a 13 percent decline from the fourth quarter of 2008.
Operating profit for the quarter was 470 billion won on a consolidated basis, representing a strong turnaround from the 740 billion won loss in the previous quarter. Net income reached 620 billion won, up from the previous quarter due to an increase in equity income.
Despite the extremely challenging market environment, Samsung made a strong recovery from the fourth quarter of 2008, supported by stabilizing semiconductor prices, increased profit margin for mobile phones, and careful control of marketing and other expenditure.
"The global economy is likely to continue to recover in the second quarter but lingering uncertainty means it is difficult to predict a sharp improvement in demand or the business environment in the near term," said Robert Yi, Vice President and head of Samsung Electronics' Investor Relations Team.
"We will respond to the difficult market situation by seeking to reinforce our market and technological leadership, focusing on high-end products and further enhancing our global supply chain management."
Samsung's Semiconductor divisions recorded an operating loss of 670 billion won. Revenue reached 5.52 trillion won, a 5 percent decline quarter-on-quarter. Despite continuing weak demand and seasonality, Samsung maintained market leadership and saw operating performance improve compared with the fourth quarter of 2008.
Continued oversupply in the DRAM market weighed on the performance of the Memory Division, but NAND prices improved due to a reduction in supply. The System LSI Division saw a decline in revenue due to seasonal factors.
Samsung forecast demand to improve slightly in the second quarter, though it remained concerned that oversupply will prevent a meaningful improvement in prices.
The LCD Division recorded revenue of 4.11 trillion won and an operating loss of 310 billion won. Nevertheless, Samsung outperformed the broader market in LCDs thanks to increased sales of large-size panels. The LCD Division registered 6 million in unit sales, increasing its global market share. With the Chinese consumer electronics market remaining relatively strong, Samsung sought to increase sales of premium LCD products and slim LED panels to this important market.
For the second quarter, Samsung forecast a slight improvement in the business environment as demand gradually increased in developed markets and TV set makers' inventories returned to normal levels. However, market conditions will remain challenging as competitors continue to increase capacity and global demand remains muted.
Samsung's Telecommunications divisions rebounded in the first quarter to record a profit margin of 11 percent, after registering 1 percent in the previous quarter. The Telecommunication division posted revenues of 9.77 trillion won and an operating profit of 1.12 trillion won on a consolidated basis. Samsung also maintained unit sales at the same level, despite a contraction in the overall market. The introduction of a selection of new mid- and high-end mobiles enabled the company to increase its unit sales price.
Samsung forecast that while overall demand will remain weak in the second quarter, consumer demand for smart phones, touch-screen mobiles and 3G devices will slightly improve. It aimed to continue to outperform the broader market by introducing new high-end mobiles and through strong marketing activities in conjunction with carriers.
Samsung's Digital Media divisions registered improved operating profit of 380 billion won in the first quarter on a consolidated basis, as sales of premium product lines increased and marketing expenditure was carefully controlled. Revenue was 10.07 trillion won, a 20 percent decline from the previous quarter due to seasonality.
Flat-panel TV sales remained weak but Samsung outperformed the market thanks to a strong performance in North America. Samsung's new range of large-screen LED TVs introduced in the first quarter was well received by consumers and initial sales figures were positive.
The Digital Appliance Division performed well as sales of premium refrigerators and drum washing machines increased in North America.
Samsung forecast demand will increase marginally in the second quarter driven by seasonal factors and the introduction of digital broadcasting in the United States. The company said it will focus on expanding sales of LED TVs by augmenting its product lineup, aiming to reinforce its market leadership in the new technology segment.
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About Samsung Electronics
Samsung Electronics Co., Ltd. is a global leader in semiconductor, telecommunication, digital media and digital convergence technologies with 2008 consolidated sales of US$96 billion. Employing approximately 150,000 people in 134 offices in 62 countries, the company consists of two business units: Digital Media & Communications and Device Solutions. 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.