Samsung logs record quarterly profit on higher prices

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By Lee Youkyung
SEOUL, Oct. 30 (Yonhap) -- Samsung Electronics Co. said Friday its third-quarter
earnings more than tripled to a record high on higher prices for computer memory
chips and strong sales of mobile phones and flat-screen TVs.
Net profit stood at 3.72 trillion won (US$3.16 billion) in the July-September
period, compared with 1.22 trillion won a year ago, the world's top memory
chipmaker said in a regulatory filing.
Sales jumped 29.1 percent on-year to 24.86 trillion won, and operating profits
doubled from a year ago to 2.77 trillion won, it said.
On a consolidated basis, which includes Samsung's foreign subsidiaries, sales
reached 35.87 trillion won in the third quarter, with operating profit standing
at a quarterly record of 4.23 trillion won.
Shares of Samsung Electronics traded at 734,000 won on the Seoul bourse as of
2:30 p.m., up 2.23 percent from Thursday's close.
Samsung attributed the robust earnings to a rise in chip and display panel prices
as well as increased sales of mobile handsets and TVs.
Samsung's flagship memory chip business achieved a marked turnaround from recent
operating losses as a tight chip supply and increased demand for computers drove
up global chip prices. The average sales price of dynamic random access memory
(DRAM) chips rose 20 percent on quarter, while spot prices for 1Gb DDR2 chips
used for personal computers were up 28 percent.
Samsung said it sold 60.2 million cell phones in the third quarter, up 15 percent
from three months earlier. The company is the world's No. 2 mobile phone maker,
trailing Finland's Nokia Corp.
Its liquid crystal display (LCD) panel divisions saw a rise both in shipments and
prices. Shipments of large-size LCD panels climbed 26 percent on-year to 148
million and panel prices in all segments jumped, with panel prices for laptop
computers up 22 percent.
Samsung posted robust sales in flat-screen TVs, with third quarter sales growing
24 percent on year to 7.73 million. It also sold 1.2 million units of light
emitting diode (LED) TVs, about half of its annual sales goal for the new model,
the company said.
Samsung said fourth quarter earnings are likely to decrease from the previous
quarter due to rising marketing costs and a strengthening won, but it painted an
upbeat outlook for the next year as the global economy was expected to make a
rebound, pushing up demand for computers, mobile handsets and LCD panels.
"Global demand for information technology products and consumer electronics are
predicted to recover next year on a global economic recovery, so we forecast
improved earnings for 2010 from 2009," said Lee Myung-jin, head of the investor
relations team.
For 2010, Samsung executives said during a conference call that demand for LCDs
will go up thanks to major holidays and sporting events in the first quarter.
Memory chip prices are expected to continue their upward trend until March, 2010.

Samsung also forecast that the smartphone market would at least double in size in
2010 from this year, and says it plans to double the size of its line-up of
smartphone models.
For 2010, Samsung said it is mulling spending 5.5 trillion won for memory chips
and 3 trillion won for LCD panel production.
ylee@yna.co.kr
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