3rd LD) Samsung Electronics reports 44 pct fall in Q3 profit

(ATTN: UPDATES with closing share price in para 5, quotes from IR meeting at bottom)
SEOUL, Oct. 24 (Yonhap) -- Samsung Electronics Co., the world's largest maker of
computer memory chips, said Friday that its third-quarter earnings fell 44.4
percent from a year earlier as a global glut of memory chips and displays drove
down prices.
Net profit reached 1.22 trillion won (US$873.3 million) in the three months ended
Sept. 30, compared with 2.19 trillion won a year earlier, the company said in a
regulatory filing.
Sales rose 15.4 percent on-year to 19.2 trillion won, but operating profit
tumbled 51 percent to 1.02 trillion won, the company said.
The third-quarter operating profit, however, was above a median estimate of 839.2
billion won in a survey of seven analysts conducted by Yonhap News Agency.
Shares of Samsung tumbled 13.76 percent to close at 407,500 in the Seoul bourse.
Profits from its semiconductor division slumped 74 percent to 240 billion won on
sales of 4.78 trillion won.
Samsung, also the world's largest maker of liquid crystal display (LCD) screens,
said profit margins for its LCD business fell to 8 percent from 21 percent in the
second quarter.
The company, the world's second-biggest mobile phone maker, sold 51.8 million
mobile phones in the third quarter, compared with 45.7 million units in the
second.
Profit margins in the handset division, however, fell to 7 percent in July from
13 percent the previous quarter.
"The market environment in the third quarter proved challenging amid rising costs
and a downturn in the global economy," the company said in a statement, adding
that it expects to see more challenges in the coming months.
The company also said it plans to cut down investments in the semiconductor
business for the year from the initially-planned 12.5 trillion won.
"The amount of investment cuts won't exceed 1 trillion won and will likely be
around the several hundred-billion-won level," Chu Woo-sik, head of Samsung's
investors relations team, said during a conference call in Seoul.
Chu also said that current global economic conditions will affect the company's
investments for next year but underlined that investments will remain more
"aggressive than its competitors."
Concerning Samsung's fourth quarter prospects, the company remains unclear as to
whether its semiconductor business will see improvements in profitability,
according to Chu. He also expressed skepticism over the outlook of the LCD
business.
Samsung recently scrapped its bid to buyout U.S. flash memory maker SandDisk
Corp., and currently has no plans to make a second attempt for the acquisition,
Chu said, before adding the door to a possible deal remains open if the parties
come to an agreement.
Samsung had made a $5.85 billion bid to take over SanDisk, but the
California-based company rebuffed the offer, saying it appeared "opportunistic"
and undervalued the company. Samsung on Thursday announced that it dropped the
bid, citing the financial crisis and stalled negotiations between the parties.
odissy@yna.co.kr
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