Samsung beats expectations in tough market

 

DRam and handset profits offset Flash and LCD slump.

Electronics giant Samsung has reported better than expected third-quarter results, boosted by sales of semiconductors and mobile phones. 

A global DRAM supply slowdown, which has pushed up prices, was a key factor in the company's strong performance in a tough market, analysts said today.

Samsung's quarterly net income rose to US$2.31 billion, an increase of 16 percent compared to the same quarter last year. Sales reached US$15.93 billion for the quarter.

"Our strategy of producing high performance, differentiated products into multiple end markets allowed us to power ahead and deliver solid third-quarter results in a challenging IT environment," said senior Samsung vice president Woosik Chu.

Operating profit was boosted by better than expected performance at Samsung's semiconductor division, which made some US$80 million more than anticipated during the quarter.

"The strong semiconductor results appear to be powered by robust performance of DRAM," said Jay Kim, an analyst at Hyundai Securities.

Samsung, one of the world's largest memory chip makers, shifted memory production facilities from older chips to higher-profit products like DDR2 memory.

This helped push DRam profit margins up by 3.7 percent compared to the previous quarter, according to data supplied by Samsung. The company plans to invest an extra US$1 billion to boost memory chip production capacity.

"The price of DRAM chips is expected to remain strong in the fourth quarter, and the demand for Nand Flash memory chips is expected to grow with the introduction of new products that require larger memory such as MP3 players, personal media players and handsets," the company announced.

"In addition, migration to the advanced process technology, in particular 60nm 8Gb Nand Flash technology, is expected to reduce manufacturing costs and improve profitability."

Although a glut of production has pushed Flash prices down this year, some analysts are optimistic about Samsung's efforts to switch Flash production to higher profit chips.

"Flash also seems to have a foothold for higher profit margins in the fourth quarter of 2006," said Kim. "We also expect to see a less steep Flash price decline in the fourth quarter."

While global mobile phone profits continued on a downward trend owing to price competition and market saturation, Samsung remained profitable in this sector and reported some encouraging news.

The company sold almost 31 million of its top-of-the-line 'Ultra edition' slimline mobile phone handsets in Europe during the quarter, recording an average profit margin of more than 11 percent on these products.

Despite a highly competitive display panel market, Samsung still managed to eke out a slim profit from its mammoth LCD sales operation.

The company reported US$167 million profit from US$3.13 billion in revenue generated by its LCD business worldwide. Competitor LG-Philips LCD reported a major loss earlier this month. 

Copyright ©v3.co.uk


Samsung beats expectations in tough market
 
 
 
Top Stories
Hockey flags billion-dollar Centrelink mainframe replacement
Claims 30 year-old tech is holding Govt back.
 
Ombudsman wants to monitor warrantless metadata access
Requests ability to report publicly.
 
Frugality as a service: the Amazon story
Behind the scenes, Amazon Web Services is one lean machine.
 
 
Sign up to receive iTnews email bulletins
   FOLLOW US...

Latest VideosSee all videos »

The great data centre opportunity on Australia's doorstep
The great data centre opportunity on Australia's doorstep
Scott Noteboom, CEO of LitBit speaking at The Australian Data Centre Strategy Summit 2014 in the Gold Coast, Queensland, Australia. http://bit.ly/1qpxVfV Scott Noteboom is a data centre engineer who led builds for Apple and Yahoo in the earliest days of the cloud, and who now eyes Asia as the next big opportunity. Read more: http://www.itnews.com.au/News/372482,how-do-we-serve-three-billion-new-internet-users.aspx#ixzz2yNLmMG5C
Interview: Karl Maftoum, CIO, ACMA
Interview: Karl Maftoum, CIO, ACMA
To COTS or not to COTS? iTnews asks Karl Maftoum, CIO of the ACMA, at the CIO Strategy Summit.
Susan Sly: What is the Role of the CIO?
Susan Sly: What is the Role of the CIO?
AEMO chief information officer Susan Sly calls for more collaboration among Australia's technology leaders at the CIO Strategy Summit.
Meet the 2014 Finance CIO of the Year
Meet the 2014 Finance CIO of the Year
Credit Union Australia's David Gee awarded Finance CIO of the Year at the iTnews Benchmark Awards.
Meet the 2014 Retail CIO of the Year
Meet the 2014 Retail CIO of the Year
Damon Rees named Retail CIO of the Year at the iTnews Benchmark Awards for his work at Woolworths.
Robyn Elliott named the 2014 Utilities CIO of the Year
Robyn Elliott named the 2014 Utilities CIO of the Year
Acting Foxtel CIO David Marks accepts an iTnews Benchmark Award on behalf of Robyn Elliott.
Meet the 2014 Industrial CIO of the Year
Meet the 2014 Industrial CIO of the Year
Sanjay Mehta named Industrial CIO of the Year at the iTnews Benchmark Awards for his work at ConocoPhillips.
Meet the 2014 Healthcare CIO of the Year
Meet the 2014 Healthcare CIO of the Year
Greg Wells named Healthcare CIO of the Year at the iTnews Benchmark Awards for his work at NSW Health.
Meet the 2014 Education CIO of the Year
Meet the 2014 Education CIO of the Year
William Confalonieri named Healthcare CIO of the Year at the iTnews Benchmark Awards for his work at Deakin University.
Meet the 2014 Government CIO of the Year
Meet the 2014 Government CIO of the Year
David Johnson named Government CIO of the Year at the iTnews Benchmark Awards for his work at the Queensland Police Service.
Q and A: Coalition Broadband Policy
Q and A: Coalition Broadband Policy
Malcolm Turnbull and Tony Abbott discuss the Coalition's broadband policy with the press.
AFP scalps hacker 'leader' inside Australia's IT ranks.
AFP scalps hacker 'leader' inside Australia's IT ranks.
The Australian Federal Police have arrested a Sydney-based IT security professional for hacking a government website.
NBN Petition Delivered To Turnbull's Office
NBN Petition Delivered To Turnbull's Office
UTS CIO: IT teams of the future
UTS CIO: IT teams of the future
UTS CIO Chrissy Burns talks data.
New UTS Building: the IT within
New UTS Building: the IT within
The IT behind tomorrow's universities.
iTnews' NBN Panel
iTnews' NBN Panel
Is your enterprise NBN-ready?
Introducing iTnews Labs
Introducing iTnews Labs
See a timelapse of the iTnews labs being unboxed, set up and switched on! iTnews will produce independent testing of the latest enterprise software to hit the market after installing a purpose-built test lab in Sydney. Watch the installation of two DL380p servers, two HP StoreVirtual 4330 storage arrays and two HP ProCurve 2920 switches.
The True Cost of BYOD
The True Cost of BYOD
iTnews' Brett Winterford gives attendees of the first 'Touch Tomorrow' event in Brisbane a brief look at his research into enterprise mobility. What are the use cases and how can they be quantified? What price should you expect to pay for securing mobile access to corporate applications? What's coming around the corner?
Ghost clouds
Ghost clouds
ACMA chair Chris Chapman says there is uncertainty over whether certain classes of cloud service providers are caught by regulations.
Was the Snowden leak inevitable?
Was the Snowden leak inevitable?
Privacy experts David Vaile (UNSW Cyberspace Law and Policy Centre) and Craig Scroggie (CEO, NextDC) claim they were not surprised by the Snowden leaks about the NSA's PRISM program.
Latest Comments
Polls
Which bank is most likely to suffer an RBS-style meltdown?





   |   View results
ANZ
  20%
 
Bankwest
  9%
 
CommBank
  12%
 
National Australia Bank
  17%
 
Suncorp
  23%
 
Westpac
  19%
TOTAL VOTES: 1512

Vote