Samsung Elec Q4 profit falls on NAND chips
SEOUL (Reuters) - Samsung Electronics Co. Ltd. (005930.KS) reported an 8.5 percent drop in its quarterly net profit on Friday, hurt by lackluster shipments of flash memory chips and falling prices of flat screens.
The outlook for the first half of 2007 is bleak as the world's biggest memory chip maker will likely face further price pressures on semiconductors and flat screens.
"Samsung Electronics anticipates challenges in key product areas in the (first) quarter, a seasonally weak period," said Chu Woo-sik, Samsung's senior vice president of investor relations, in a statement.
Samsung earned 2.35 trillion won ($2.50 billion) in net profit for the quarter ended December 31, compared with 2.56 trillion a year earlier and 2.19 trillion in the previous quarter.
The result in line with the 2.34 trillion won forecast by 29 analysts surveyed by Reuters Estimates.
Shares in Samsung Electronics, the country's biggest stock worth $91.31 billion, rose 3.09 percent to 600,000 won by 0126 GMT, higher than the 1.5 percent gain in the wider market (^KS11 - news), after it announced a 1.8 trillion won share buyback.
Revenue came in at 15.7 trillion won, up from 15.52 trillion a year earlier.
Samsung saw the overall profit margin at its mainstay chips division rise to 31 percent from the July-September period's 26 percent. But the South Korean firm was hurt by sluggish shipment growth in NAND flash chips that power digital gadgets and an unfavorable product mix in computer memory chips.
Samsung, the world's third-largest mobile phone maker, sold 32 million mobile phones in the fourth quarter, up from the third quarter's 30.7 million units, but profit margin in the handset division fell to 8 percent from 11 percent in the third.
Samsung's LCD unit also underperformed last year's results, with margins coming in at 10 percent against 13 percent in the fourth quarter of 2005 as brisk sales were offset by falling prices. The Q4 margin in LCDs, however, was double that in the preceding quarter due to seasonal factors.
The stock fell 7.7 percent in the fourth quarter, trailing a 4.6 percent rise in the KOSPI.
hightechinvstr
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Chips the bright spot! Re: Samsung Elec Q4 profit falls on NAND chips (1 Rating) 11-Jan-07 10:42 pm Ok let's look at Samsung's 3 main divisions, chips, cell phones, and LCDs
"Samsung saw the overall profit margin at its mainstay chips division rise to 31 percent from the July-September period's 26 percent.
Samsung, the world's third-largest mobile phone maker, sold 32 million mobile phones in the fourth quarter, up from the third quarter's 30.7 million units, but profit margin in the handset division fell to 8 percent from 11 percent in the third.
Samsung's LCD unit also underperformed last year's results, with margins coming in at 10 percent against 13 percent in the fourth quarter of 2005 as brisk sales were offset by falling prices."
Clear and clear, if not for the two laggards, Samsung i.e. chips will be up and probably up a lot given margins at chips gone up from 26% to 31%.
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