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Samsung Electronics Records High Sales in 2Q

Posted July. 26, 2008 03:30,   


Despite global economic slowdown and rapidly growing prices, Samsung Electronics recorded its biggest quarterly sales in the second quarter.

Samsung’s total sales reached 18.14 trillion won in the second quarter, a 6 percent increase over the previous quarter and a 24 percent jump from a year ago.

The company’s operating profit for the second quarter stood at 1.89 trillion won, surging 108 percent from the previous year. However, its operating profit fell 12 percent from the first quarter.

If consolidated sales, which include sales of foreign branches, are also considered, Samsung’s sales for the second quarter increased 12 percent from the previous quarter to 29.1 trillion won but its operating profit dropped 7 percent from the first quarter to 2.4 trillion won.

Its LCD business earned 4.71 trillion won in sales. Also, its operating profit has exceeded the one trillion mark for two straight quarters since the first quarter of this year.

Samsung said, “With demand for LCD televisions increasing, big customers such as Japan’s Sony have continuously ordered LCD screens. As a result, we could record an earning rate of 21 percent in the second quarter.”

The company’s information communication business saw its sales increase 2 percent from the first quarter to 6.14 trillion won. Nevertheless, its operating profit margin fell 3 percentage points from the previous quarter to 13 percent due to surging promotion costs for mobile phones targeting high-end consumers and intensifying price competition. Similarly, its operating profit tumbled 15 percent to 790 billion won.

In the semiconductor business, sales increased 4 percent from the previous quarter to 4.58 trillion won and operating profit soared 38 percent to 270 billion won.

Despite the popularity of flat-screen televisions, Samsung’s digital media business recorded a loss of 160 billion won as competitors such as Sony released televisions at a much lower cost. The consolidated operating profit of the business also plunged 33 percent from the previous quarter.

Joo U-shik, vice president and head of the investor relations department of Samsung Electronics, said, “Given global economic slowdown, Samsung Electronics will face an unfavorable management environment in the second half. However, it will nurture its differentiated competitiveness through an investment of 12.5 trillion won.”

After the announcement Samsung’s stock price fell 38,000 won (6.19 percent) to 576,000 won per share, Friday.

The nation’s largest electronics firm also decided Friday to establish “Samsung Mobile Display,” a joint venture between Samsung Electronics and Samsung SDI, which will produce AM OLED (organic light-emitting diode) starting in September.

imsun@donga.com nex@donga.com