Good Samsung Start ...
... BUT while record handset units were up 30% YoY with solid margin improvement (approaching 13% from 7% in Q4), handset revenue sales were down 2% YoY and lower than expected.
Looong Call. Lots of NAND talk. Q1 Samsung Earnings CC Slides here ...
sec.co.kr
I. Q1 Handset shipments of 34.8mn units (+6% QoQ and 30% YoY)
• Export: Shipment increase due to strong sales of “Ultra Edition” and newly launched VGA/Color models in emerging markets (China) despite weak seasonality (worldwide market: down 10% QoQ).
• Domestic: Increased shipment with competitive products in intense market share competition amongst operators (up 43% QoQ)
• ASP: 4Q’06 $168 to 1Q’07 1Q $155 (down 8% QoQ). ASP decline due to increased sales of VGA/Color models and strong competition in weak seasonality
• Best Selling Products: D900, E250
• Telecom division margins (including networks) = 13% (up 29% YoY)
• Q1 2007 Samsung Handset Revenue Sales
1Q ’07 Q-on-Q 4Q ’06 1Q ’06 Y-on-Y
======= ====== ====== ====== ======
4.28¹'² -1% 4.31¹ 4.39¹ -2%
·
¹ (Units : Trillion, KRW)
² 4.28 Trillion KRW = $4.652 Billion USD at January 31, 2007
New shooter presenting Telecoms = Dr. David Steel (V.P., Telecommunication Business) is well spoken, soft spoken.
II. Business Outlook: Market
• ’07 Global handset demand may exceed 1.07B units
--> Global market demand to slow down YoY due to decelerated net addition, but to sustain above 10% stable growth
--> market growth will be driven by replacement demand of multimedia (music/mega camera) and 3G handsets (mega camera portion: ’06. 23% -> ’07. 38%)
--> Domestic market to expand due to strong competition among operators with the launch of HSDPA service
II. Business Outlook: Samsung [Music the Key Driver]
• Q2 ’07: Shipment increase expected with the launch of new models including Ultra Edition II
--> Launch many new models including the UE II, Ultra Music (Beyonce)/Video, HSDPA (4 models)
• ’07 total shipment may exceed 133M units
--> Strengthen high-end line-up with the Ultra Edition II, specialized feature models (messaging/mobileTV, music)
--> Expect increased sales of specialized models for mass market
--> Enhance WCDMA product line-up and lead the HSDPA market
--> Closer look at emerging markets and lower end sets with good margins but strategy not set, but under $100 sets rose from low 30% of mix in '06 to high 30s in Q1.
--> Saw soft market in Europe in Q1
--> Margins likely to be down somewhat in Q2 (SG&A spend)
• Expand into global Mobile WiMAX market with various types of Mobile WiMAX devices
--> Secure more than 5 new operators to deploy Mobile WiMAX business
III. Historical
Q1 2006 Key Handset Metrics
Sales ASP Revenue Operating
Units EURO USD EURO USD Margin
===== ========== ======= ======== ==========
Samsung 29.0m €142 $171 €3.784b $4.570b 10.0%
18 Month Global Shipments and Market Share Estimates (Strategy Analytics)
Global
Sell-In Q3 '05 Q4 '05 2005 Q1 '06 Q2 '06 Q3 '06 Q4 '06 2006
========= ====== ====== ====== ====== ====== ====== ====== ======
Nokia 66.6m 83.7m 264.9m 75.1m 78.4m 88.5m 105.5m 347.5m
31.7% 34.1% 32.4% 33.3% 33.3% 34.5% 35.2% 34.1%
--------- ------ ------ ------ ------ ------ ------ ------ ------
Motorola 38.7m 44.7m 146.0m 46.1m 51.9m 53.7m 65.7m 217.4m
18.4% 18.2% 17.9% 20.4% 22.1% 21.0% 21.9% 21.3%
--------- ------ ------ ------ ------ ------ ------ ------ ------
Samsung 26.8m 27.2m 102.9m 29.0m 26.3m 30.7m 32.0m 118.0m
12.8% 11.1% 12.6% 12.8% 11.2% 12.0% 10.7% 11.6%
###
>> Samsung Electronics Posts Weak Q1 on Chip Margin Collapse
Reuters (Seoul)
April 12, 2007 (9:44pm ET)
reuters.com
Samsung Electronics Co. Ltd., the world's top memory chip maker, reported a 15 percent fall in first-quarter earnings on Friday, hurt by a steep drop in semiconductor margins and lower-than-expected shipments. ... <snip> ... Samsung, the most valuable technology company outside the United States, posted January-March net profit of 1.6 trillion won ($1.72 billion), down from 1.88 trillion won a year earlier -- slightly lower than a forecast for 1.66 trillion won from nine analysts polled by Reuters. ... <Big Snip> ... The world's third-largest maker of mobile phones after Nokia (NOK1V.HE: Quote, Profile , Research) and Motorola (MOT.N), sold 34.8 million handsets in the first quarter, a record after the 32 million sold in the fourth quarter. Mobile phone margins rose to 13 percent from the fourth quarter's revised 7 percent. ... <snip> ... ($1=931.4 Won ###
Next to bat is Moto next Wednesday after the bell. It will be interesting to see if Samsung takes over the #2 slot for handset revenue sales.
- Eric - |
