SAMSUNG Electronics Reports Fourth-Quarter Financial Results

SAMSUNG Electronics Reports Fourth-Quarter Financial Results

Samsung Electronics Co., Ltd. today announced fourth quarter revenue of 15.69 trillion won for the period ended December 31, 2006, an increase of 3% over the previous quarter. Operating income for the quarter was 2.05 trillion won, an 11% increase compared with 1.85 trillion in the previous quarter. Net income for the quarter was 2.35 trillion won, a 7% increase over the previous quarter. “In the fourth quarter, key products powered a recovery in overall earnings despite price declines in some product categories, Samsung’s differentiation strategy continues to boost profitability.” said Dr. Woosik Chu, senior vice president and head of Samsung Electronics’ investor-relations team.

Operating income and net income growth for the quarter were driven by the strong performances of the Semiconductor and LCD businesses. Operating profit growth was in the double digits even though the company spent 0.53 trillion won more in marketing over the previous quarter. In addition, net income rose above market expectations because of buoyant profitability from the company’s overseas operations, which are reflected as equity gains. Sales and operating income of the Semiconductor Business increased to 5.42 trillion won and 1.66 trillion won, respectively, as the price of DRAMs remained robust due to strong seasonal demand for personal computers. Strong profitability continued through the efforts to enhance the product mix, such as increasing production ratio of the DDR2. The expanded transition to 60-nanometer (nm) NAND Flash technology and Multi Level Cell technology reduced manufacturing costs and further improved profitability in spite of a decline in NAND prices in December.

The Telecommunication Network Business posted revenue of 4.65 trillion won, and operating income of 0.35 trillion won. Samsung sold 32 million phones in the fourth quarter, a record high on a quarterly basis due to strong sales of the popular Ultra Edition line. Annual unit sales reached 118 million, surpassing the business unit’s annual target figure. Marketing expenditure increases for end-of-the-year sales promotions negatively impacted operating income. In 2007, Samsung will strengthen its high-performance, premium line-up with the launch of 30 some WCDMA phones and specialty phones that focus on music, video, and messaging functions.

The LCD Business reported revenue and operating income of 3.18 trillion won and 0.31 trillion won, respectively. Revenue and operating margins in the quarter posted a 6% and a 90% increase compared with the previous quarter, respectively. Strong seasonal demand for panels for IT products, such as monitors and note PCs, and a mitigated price drop for 40-inch and larger panels k helped Samsung Electronics post solid results in the fourth quarter. The quarterly sales of LCD TV panels recorded 3 million units and the annual sales reached 11 million units. In particular, Samsung Electronics achieved sales of 5 million units in the company’s differentiated 40-inch and larger panel category for a market share of 60%, further extending its leadership in the LCD TV panel market

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