Samsung Reports 44% Drop in Q3 Net Profit

The semiconductor division slumped 74%.

Samsung Electronics, the world's largest memory chip maker, on Oct . 24 reported a 44% fall in third-quarter net profit amid the global economic downturn.

Net profit was 1.22 trillion won (US$873.3 million) in July-September compared to 2.19 trillion won a year earlier. Sales rose 15.4% year-on-year to 19.2 trillion won but operating profit tumbled 51% to 1.02 trillion won.

Profit from Samsung's semiconductor division slumped 74% to 240 billion won on sales of 4.78 trillion won.

Samsung, also the world's largest maker of liquid crystal display screens, said profit margins for its LCD business fell to 8% from 21% in the second quarter due to a global oversupply.

The company, the world's second-biggest mobile phone maker, sold 51.8 million mobile phones in the third quarter compared with 45.7 million in the second. Profit margins in the handset division, however, fell to 7% in July from 13% in the previous quarter.

"The market environment in the third quarter proved challenging amid rising costs and a downturn in the global economy," Chu Woo-Sik, Samsung's senior executive in charge of investor relations, said."We foresee the coming months to be an even more challenging period. Nevertheless, our strategy of creating differentiated product portfolios has protected Samsung from significant disruptions in revenues, and enabled the company to outperform market expectations."

Copyright Agence France-Presse, 2008

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