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Samsung Reports Double-Digit Sales, Profit Gains

4/27/2012 11:10:29 AM Eastern

Seoul, South
Korea - Samsung Electronics reported double-digit increases in revenues and
operating profits for the first quarter, ended March 31.

Revenues in the
quarter were 45.27 trillion Korean won on a consolidated basis, a 22 percent
increase year on year.

For the quarter, Samsung's
operating profit reached an all-time high of 5.85 trillion won, representing a
98 percent increase year on year. Consolidated net profit for the January
through March period was 5.05 trillion won.

Despite a
decrease in sales of semiconductor chips and TVs due to seasonal factors, an
increase in profitability in display panels and mobile phones pushed up
quarterly operating profit margins by 1.7 percentage points to 12.9 percent.

Samsung's strong
performance in the quarter was driven mainly by the IT & mobile communications
segment, which is comprised of four businesses: mobile communications,
telecommunication systems, IT solutions and digital imaging. In particular,
solid growth in the mobile communications business, with brisk sales of
flagship Galaxy Note and Galaxy S II devices contributed to the company's
profitability.

The consolidated
operating profit for IT and mobile communications businesses reached 4.27
trillion won on revenue of 23.22 trillion won. The display panel business
rebounded in the first quarter with operating gains of 280 billion won,
following an uptick in demand for high-margin panels used in tablets, 3D/ LED
TVs and premium OLED panels.

Operating profit
for the display panel business turned around from the previous quarter to
register 280 billion won on revenue of 8.54 trillion won in the first quarter.

Despite
traditionally weak seasonality, continued economic stagnation in Europe and the
prolonged supply shortage in the PC industry, the display panel business was
able to improve profitability by expanding sales of high-end premium panels,
such as LED TV and 3D panels, which pushed TV panel sales up in the mid-20 percent
range on-year. Increased sales of high-resolution panels for tablet PCs and
OLED panels for smartphones also helped boost profit in the quarter, Samsung
said.

Moving forward
with the establishment of Samsung Display Corporation, the company said it will
continue to enhance profitability by expanding sales of premium panel products
such 3D, large-size and LED panels, while smartphone demand is expected to
continue to fuel OLED panel sales.

The IT and mobile
communications division registered quarterly operating profits of 4.27 trillion
won for the first period. Revenue reached 23.22 trillion won, and the mobile
unit accounted for 18.90 trillion won, up 86 percent year on- ear.

Growth in
shipments of Samsung's flagship Galaxy Note and Galaxy S II and other premium
mobile devices yielded high returns, with significant growth in China, Central
and South America, the Middle East and Africa. Samsung is expected to continue
its strong growth momentum in the second quarter, following the announcement of
the next Galaxy device in London on May 3.

Samsung's
consumer electronics businesses, which encompass visual display and digital appliances,
registered an operating profit of 530 billion won in the quarter, up 550
percent year on year, on revenues of 10.67 trillion won.

Although weak
seasonality led to a quarter-on-quarter dip in revenue, strong sales of premium
TVs in developed markets and LED TVs in emerging markets saw shipments outstrip
market growth and drive a sharp increase in profitability. Highlights for the
quarter included an increase in sales of more than 50 percent for Samsung's
flagship 7000/8000 TV series on-year, while the digital appliances business
improved profitability, both on-year and on-quarter, by increasing its portion
of premium product sales.

In the second
quarter, market growth for flat panel TVs in the mid-single digits is expected
on rising demand in emerging markets and increased sales of LED TVs which are
forecast to account for more than 60 percent of the TV market in the quarter, the
company said.

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