Korea Herald On Samsung Q1
>> Samsung Electronics Net Profit Dips 41%
Yang Sung-jin
Korea Herald
2003.04.19
koreaherald.co.kr
Samsung Electronics, the world's largest memory chipmaker, said yesterday it posted 1.13 trillion won ($937 million) in net profit in the first three months of this year, down 41 percent from 1.9 trillion won in the year-earlier period.
Sales for the first quarter ended March 31 also fell to 9.6 trillion won ($7.94 billion), compared with 9.9 trillion won a year earlier. Operating profit, or EBIT (earnings before interest and taxes) stood at 1.35 trillion won, down 36 percent from 2.1 trillion won a year earlier.
Analysts said Samsung's lower-than-expected earnings stemmed largely from weak memory chip prices, underscoring the protracted slump plaguing the global high-tech industry amid growing investor jitters over the cloudy outlook.
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Samsung sold 13.2 million mobile handsets during the first quarter, up 14 percent from 11.6 million units in the previous quarter and up 39 percent from the year-earlier period. It exported 11.6 million handset units, up 21 percent from 9.6 million units in the previous quarter, with India and the U.S. market fueling the upward drive. The portion of export accounted for 88 percent in the total sales of handsets.
But average selling prices for handsets edged down about 5 percent to 385,000 won in the domestic market and $177 in the export market, hurt by the abrasive price-cutting competition as the handset manufacturing sector matures.
Samsung, the world's third-largest mobile phone maker after Nokia and Motorola, said it targets to ship 52.5 million handsets, or 13 percent share of the global market, in 2003. The world's total handset market is estimated at 435 million units this year.
Analysts noted that Samsung's move to become less dependent on Qualcomm Inc. for chips used for mobile phones is likely to have far-reaching impact on the CDMA market. Korea is currently offering third-generation mobile service through its cdma2000 1x and EV-DO networks, with three carriers - SK Telecom, KTF and LG Telecom - rely on Qualcomm's CDMA technology to maintain more than 32 subscribers.
Samsung has long been using chips from Qualcomm to make phones but it is now moving to launch a cdma2000 handset containing its own chips this month in Korea.
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Analysts in Seoul said it is inevitable to revise down Samsung's 2003 earnings projection given that the global high-tech market remains in the doldrums and the outlook is also bleak. Local brokerages set the yearly sales of Samsung at 42.6 trillion won, down 1 percent from the initial forecast of 43.1 trillion won. The yearly net profit was also revised down from 6.2 trillion won to 5.9 trillion won. <<
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