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By | 16th October 2006 21:44

Samsung has bloody good quarter

Confounds expectations

Samsung has reported a 16 per cent increase in profits for the third quarter of 2006 compared with the same period in 2005.

The Korean electronics giant posted net profit of 2.19 trillion won (€1.83bn) for the three months ending 30 September. This is far higher than analysts' expectations of a net profit of 1.89 trillion won (€1.58bn).

Sales rose 4.7 per cent to 15.22 trillion won (€12.73bn) but operating profit was down 13 per cent on Q3, 2005 to 1.85 trillion won (€1.54bn). Sales in the firm's semiconductor business reached 4.91 trillion won (€4.1bn), seven per cent up on same time last year, while memory chip sales rose five per cent.

Samsung shipped 30.7 million mobile phones, a quarterly record and 4.4 million more units higher than in Q2. Samsung is launching a new "super 3G" handset on Tuesday aimed at the European market. The SGH-i520 has a 2.3 inch display with a two megapixel camera, Bluetooth 2.0 and can be connected to a PC using USB 2.0.

These results mark the company's third profit gain in the past four quarters. Samsung has increased its estimated capital investment plan for 2006 to 10.24 trillion won (€8.56bn), an increase of 10.9 per cent on previous estimates. News of the results and the increased investment received a positive reaction on the Korean stock exchange with the KOSPI index rising one per cent.

"Our strategy of producing high performance, differentiated products into multiple end markets allowed us to power ahead and deliver solid third quarter results amid a challenging market environment of the information-technology sector," said Dr Woosik Chu, senior vice president and head of Samsung Electronics' investor-relations team.

"We anticipate our key business units to experience significant tailwinds in the fourth quarter, a seasonally strong period. Furthermore, our plan to invest an additional 1 trillion won (€830 million) to increase capacity of our memory-chip business is expected to create revenue opportunities next year," he said.

Copyright © 2006, ENN

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