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Samsung Posts Double-Digit Profit Drop

10/24/2008 11:59:00 AM Eastern

Seoul, South Korea — Samsung Electronics reported a double-digit percent drop in net income for the fiscal third quarter.

Net income was $867 million, down 43 percent, while sales were $13.7 billion, up 6 percent.

By division, LCD sales were up 2 percent compared with the previous year’s third quarter, but operating profit was down 62 percent. Telecom sales were up 12 percent (handsets were up 13 percent) while operating profit was down 36 percent. In the digital media division, sales were up 4 percent and operating profit was up 41 percent, but the semiconductor division, usual a major profit contributor, had a 12 percent drop in profits and a 4 percent increase in sales vs. the previous year’s third quarter.

In LCD, TV shipments increased quarter on quarter due to “steady panel demand from major customers” and the division has had 5 million unit sales for four consecutive quarters.

In the telecommunications division, handset shipments rose 13 percent quarter on quarter to 51.8 million and up 22 percent year on year. But the average selling price reached $135 down 5.6 percent quarter on quarter.

In digital media, which includes appliances, revenue increased 41 percent year on year lead by flat-panel sales. In flat panel, Samsung’s shipments increased 12 percent quarter on quarter. And in appliances, despite a global decline of 5 percent quarter on quarter, North American revenue increased 41 percent based on the sale of premium refrigerators.

In its fourth-quarter projections Samsung expects flat-panel shipments to reach 39 million units, with demand driven by the growth driven by a drop in 40-inch and above screen sizes. The company expects steady growth in emerging markets, as well as in the larger-than-40-inch and full HD markets.

And Samsung sees continuous expansion of the refrigerator, washing machine and air conditioner categories worldwide in the fourth quarter.