Samsung posts healthy 3Q profits

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Samsung posts healthy 3Q profits

Samsung Electronics Co. reported improved third-quarter earnings yesterday on high demand for computer memory chips, liquid crystal display televisions and cell phones. Samsung Electronics earned 2.2 trillion won ($2.3 billion) in the July-September period, up 16.1 percent from the previous year, the company said yesterday. Earnings jumped 44.9 percent from the previous quarter and sales increased 4.7 percent year-on-year to 15.22 trillion won. Operating profit dropped 13 percent, to 1.9 trillion won, compared to the year before. That figure excludes profits at Samsung’s subsidiaries. Chu Woo-sik, senior vice president and head of Samsung’s investor relations, told reporters yesterday the report was an “earnings surprise.” Samsung shares rose 0.9 percent yesterday on the Seoul exchange, closing at 650,000 won. Mr. Chu gave a rosy outlook for the final quarter, saying the company expected significant earnings improvement in all business sectors stemming from strong seasonal demand. “We also plan to invest an additional 1 trillion won, expanding production capacity for semiconductors to brace for robust consumption next year,” he said. Samsung is the world’s largest memory chip maker and third-largest cell phone handset manufacturer. In the semiconductor division, third-quarter profit fell 6 percent from last year to 4.9 trillion won amid the falling prices of NAND flash memory chips, even though sales were 7 percent higher year on year. Flash memory chips are mostly used for small digital devices such as Apple Computer’s iPod music player. Compared to the previous quarter, operating profits were 26 percent higher due to price increases in DRAM chips, largely used for storage in computers. At its handset division, Samsung sold a record 30.7 million cell phones in the third quarter, marking a 17-percent increase from the previous quarter. Profits were 5 percent lower than last year, however, due to increasing competition from Nokia and Motorola, which are rapidly gaining market share by selling inexpensive cell phones in developing countries. The world’s largest liquid crystal display maker posted 3 trillion won in sales, up 5 percent from the second quarter, thanks to increased sales of large flat panel televisions. Subsidiaries’ income rose to 521 billion won from 20 billion won in red ink last year, driven by LCD TV sales. by Wohn Dong-hee
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