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Samsung Net Down 11% In Q2

7/14/2006 02:23:00 PM Eastern

SEOUL, Korea — Samsung Electronics’ net profit declined 11 percent in the second quarter, ended June 30. The company posted net income of $1.58 billion on revenue of $14.7 billion. Operating profit for the second quarter was $1.49 billion, down 14 percent from last year’s second quarter.

A significant decline in the company’s cellular handset phone business was primarily to blame as shipments fell to 26.3 million units from 29 million in the first quarter, and operating profit for the business was 9.5 percent, down from 10 percent in the first quarter and 11.8 in the same period a year ago.

Operating profit of the company’s semiconductor business reached $1.03 billion on revenue of $4.6 billion in the second quarter, down 12 percent from the first quarter, mainly due to a drop in NAND flash chip prices.

“During the second quarter, many companies in the same industry faced difficulties due to declining prices in mainstay products,” said Dr. Woosik Chu, senior VP and head of Samsung Electronics’ investor-relations team. “However, it's noteworthy that operating profit exceeded market expectations amid a challenging market environment in the previous [quarter]. We expect the second quarter to mark the trough and anticipate improvements in the second half of this year.”

The LCD business reported revenue and operating income of $2.98 billion and $78.5 million, respectively. Sales of 40-inch and larger panels jumped 87 percent quarter-on-quarter to 1.2 million panels due to continued growing demand for flat-panel monitors.

Samsung plans to boost monthly capacity of its Line 7-1, the S-LCD joint venture, to an additional 15,000 units during the third quarter to accommodate the increasing demand for larger TVs and strengthen its market leadership in this segment.

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