Seoul, South Korea — Digital media sales, the consumer electronics business at Samsung Electronics, claimed only a marginal increase in sales for the 12 months of 2004, rising 4 percent to $7.8 billion from a year-ago $7.5 billion. Fourth-quarter CE sales dropped to $1.9 billion from $2.1 billion in the last three months of 2003, due mainly to a stagnant market in Korea.
Samsung reported a CE operating loss for 2004, coming in at a negative $29.2 million, down from a 2003 operating profit of $146 million. In the fourth quarter, the CE operating loss was $126.5 million, while the CE segment was in the black last year, recording a small fourth-quarter 2003 operating profit of $2.9 million.
Samsung’s LCD business jumped 67 percent for the 12 months, hitting $5.5 billion, compared with last year’s $5.1 billion. LCD operating profit jumped 111 percent in 2004 to $1.8 billion, up from $866.2 million in the previous 12 months. This strong performance was due to robust growth for large-sized panels for LCD monitors.
Samsung expects improved performance in 2005 from its CE business, with “momentum gains” in the digital TV segment.
Although LCD-panel demand fell in the third quarter after an “incredible” climb through the first half of 2004, Samsung expects the continued drop in LCD-panel prices to drive demand that will lead to a balancing of supply and demand in the second half of 2005.
The company’s mobile phone segment had sales of $17.3 billion form the past 12 months, a 38 percent increase over a year-ago $12.5 billion. Fourth-quarter mobile phone sales hit $3.9 billion, an increase over the $3.5 billion reported in the last three months of 2003.
Despite a lagging CE business, Samsung sales in other business segments helped boost overall 2004 revenue. For the first time in its 35 years in business, Samsung racked up a consolidated 12-month profit of over $10 billion, with net income for 2004 reaching $10.5 billion, an 81 percent increase over the $5.8 billion net registered one year ago.
Consolidated sales for the year soared 32 percent, hitting $56.1 billion, up from $42.4 billion in 2003. Operating profit over the 12 months, ending Dec. 31, reached $11.7 billion, a 67 percent increase over the $7 billion recorded year-on-year. Operating margin for the 12 months rose to 21 percent, up from 17 percent in 2003.
Fourth-quarter consolidated sales at Samsung reached $13.5 billion, down 3 percent from the third quarter, while net profit dropped 32 percent over consecutive quarters, to $1.8 billion. Fourth-quarter operating profit slid 44 percent over consecutive three-month periods, down to $1.5 billion. Operating margin in the fourth quarter hit 11 percent, down from 19 percent in the third quarter.