SAN JOSE, Calif. - Samsung Electronics Co. Ltd. announced revenues of 36.99 trillion won ($34.6 billion) on a consolidated basis for the first quarter, a 7 percent increase year-on-year.
For the quarter, the company posted consolidated net income of 2.78 trillion won ($2.6 billion), a 30 percent drop year-on-year.
In its earnings guidance, Samsung estimated first-quarter consolidated revenues would reach approximately 37 trillion won ($34.6 million) with an operating profit of 2.9 trillion won ($2.7 million).
“A difficult business environment remained in the first quarter, due to rising costs of raw materials, uncertainties in the financial market in Europe, and the devastating earthquake in Japan,” said Robert Yi, vice president and head of Samsung Electronics’ investor relations team, in a statement. “But we will actively respond to such challenges by enhancing cost competitiveness in memory products through geometry migration, launching new smartphones and tablet PCs, as well as increasing the sales focus on premium LCD panels and TVs.”
In the same statement, Samsung said: ''The impact on earnings from volatility in foreign exchange was minimal, as the fluctuation of the Korean won against the US dollar and the euro was less than 1 percent. With regards to concerns over disruptions to the supply chain after the March 11 earthquake in Japan, Samsung expects the impact on its businesses to be relatively limited.''
Samsung’s semiconductor business recorded a consolidated operating profit of 1.64 trillion won ($1.5 billion) in the first quarter, down from the 1.96 trillion won ($1.8 billion) registered a year ago. Revenue reached 9.18 trillion won (8.6 billion), a 12-percent increase year-on-year.
The memory division posted 5.87 trillion won ($5.5 billion) in revenue for the quarter, a 5-percent jump up from a year earlier. ''Weak demand for PCs compounded by seasonal factors slowed sales of PC DRAM in the quarter, but orders for server DRAM and high-density memory used in smartphones and tablet PCs remained strong,'' according to Samsung.
Sales for the System LSI Division doubled to 2.32 trillion won ($2.2 billion) on-year, ''on the back of rising demand for smartphone application processors and image sensors.''
''In the second quarter, business conditions in the key DRAM segment are expected to improve slightly. Increased demand for NAND and System LSI products will also sustain growth momentum, as smartphone and tablet PC makers introduce new models,'' Samsung said.
The company's total panel shipments decreased by high-single-digit percent quarter-over-quarter, but increased approximately 10 percent year-over-year. Handset shipments were 70 million units in the period, up 9 percent year-over-year, but down 14 percent from the previous quarter.
A net income of $2.6 billion on revenues of $34.6 billion is a profit of 7.5 percent of sales.
I agree the absolute number is large but 7.5 percent of sales as a profit is considered in many circles to be low. Whether it is low for any particular business depends on the field of endeavour, the scale of the business and past performance.
Is that the point we have reached? Calling it bad news when a company makes a pure profit of just... $2.6 BILLION??? My country is falling down on its knees, cutting on fundamental issues such as wages, primary health care, education etc just to try and find this kind of money... At some point, we all have to re-evaluate our priorities and turn from investors to humans again...
I feel that all these products has reached a saturation in terms of its perfromance and innovation.The product quality ia aslo so much reliable and so the current users are not planning for upgradation or replacement. Only those newly setting up their individual families are going for buying. That is why there is a down trend. For any new product the shape of the market is like a pyramid as the days go by this reaches the minimum sale . More innovations and applications are to be introduced.
Am I correct in understanding that the Semiconductor division of Samsung contributed $ 1.5 B out of the entire $ 2.6 B in samsung profits. The proportion of profits as against the revnues goes to show the profitability of the SC business for Samsung. It is still pulling it up.
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