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Samsung Electronics posted worse-than-expected results for the first quarter of the year, blaming a U.S. dollar traded at below W1,000 during the period and a steep drop in the price of semiconductors and liquid crystal display panels.
The company on Friday announced first-quarter sales of W13.96 trillion (US $13 billion), operating profit of W1.61 trillion and net income of W1.88 trillion. That was a drop in sales of 10 percent from the previous quarter, a decline in operating profit of 24 percent and a fall in net profits of 27 percent. On average, 17 local securities firms had predicted the company would record sales of W15.19 trillion, operating profit of 2 trillion and net income of W1.98 trillion.
Samsung Electronics performed poorly in all its business areas, from the flagship semiconductor, LCD and cell phone sectors to digital media and home appliances. The semiconductor division saw sales slipped 15 percent to W4.33 trillion and operating profits 31 percent to W1.12 trillion from the previous quarter as prices of Flash memory chips plummeted by as much as 25 percent in the first three moths of the year.
The LCD division recorded W110 billion in operating profit, a 31 percent decrease on-quarter as demand for panels declined. The IT division sold a record 29 million cell phones in the first quarter, the highest-ever quarterly figure. But due to a price drop it was barely able to stay above the 10 percent mark in the operating income over revenue ratio, recording W4.59 trillion in sales and W460 billion in operating profit. The digital media and home appliances division has to content itself with reducing losses from the previous quarter.
¡°Business conditions got worse from the beginning of this year, including the won¡¯s sharp rise against the dollar, and this reduced our overall profits,¡± said Chu Woo-sik, senior vice president for investor relations. ¡°It¡¯s hard to say that we will perform much better in the second quarter, but we will certainly bottom out in the current quarter.¡±
Meanwhile, Samsung Electronics announced it will invest $220 million (W2.2 trillion) in building a semiconductor factory in Austin in the U.S. state of Texas this year. Its board of directors also decided to buy back shares worth W1.85 trillion between April 18 and mid-June.
(englishnews@chosun.com )
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