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Samsung Reports Lower Q1 Net

Seoul, South Korea — Samsung Electronics reported 15 percent lower net income and a 3 percent increase in sales vs. last year’s fiscal first quarter, with the income drop being blamed on its lucrative semiconductor operation.

Sales for the quarter, ended March 31, were $15.21 billion worldwide vs. last year’s $15.17 billion. Net income was $1.74 billion for the quarter, lower than the $2.04 billion reported the same time last year.

Compared with last year’s first quarter by division, LCD sales were $3.08 billion up 6 percent; handset sales (part of the telecommunications division) were up $4.7 billion, down 2 percent; digital media (mostly CE products) sales were $1.7 billion worldwide, down 0.2 percent; and appliance sales were $836.9 billion, up 13 percent.

In operating profit for the first quarter compared with last year by division, LCD profit were $76.1 million, down 32 percent; telecommunications (including handsets) profit was $652.2 million, up 29 percent; and digital media posted a loss of $43.5 million, down from last year’s fiscal Q1 loss of $54.4 million.

In analyzing the performance of CE-related divisions during the first quarter, there was a sharp increase in quarter flat-panel TV shipments year-to-year with a unit sales increase of 141 percent and major gain in market share. In the over 40-inch LCD-TV portion of the flat-panel category Samsung said sales were up 27 percent in the quarter vs. a gain of 14 percent in the same period last year.

Samsung noted that the average retail price of 40-inch TFT-LCD panels were down 4 percent in the first quarter vs. the fourth quarter of last year. Shipments declined for small and midsized panels 10 percent in the first quarter vs. the fourth quarter “due to seasonality,” the manufacturer noted.

For the telecommunications division, handset shipments were 34.8 million units, up 6 percent in the first quarter vs. the fourth quarter and a 30 percent increase year-on-year. Samsung said the best-selling handsets during the first quarter were the D900 and E250 units, the company said.

In appliances, Samsung reported a share increase in revenue and operation profit was due to strong sales of air conditioners, up 123 percent year-on-year in the quarter, and cost reductions.