Samsung's profits up, cuts capex in 2006

Samsung Electronics Co. Ltd reported its first profit gain in five quarters for the fourth period of 2005, but the company also cut its capital spending budget in 2006.

South Korea's Samsung posted a net income of $2.6 billion (2.6 trillion won) in the fourth quarter, up 36 percent from the previous quarter. Sales were $15.9 billion (15.5 trillion won) in the fourth quarter, up 7 percent sequentially.

In the like period a year ago, the company posted a profit of $1.8 billion (1.8 trillion won) on sales of $14.3 billion (13.9 trillion won).

The company's semiconductor sales were $5.1 billion (5.1 trillion won) in Q4, up 11 percent sequentially. Operating profit was $1.7 billion (1.62 trillion won) for the quarter, up 21 percent.

In DRAMs, Samsung suffered due to DD2 product shortages and lackluster bit growth of 5 percent in the period. On the other hand, Samsung's NAND-based flash efforts grew due to an expansion in the 4Gb product arena. Overall bit growth for NAND jumped 44 percent in the quarter.

For the year, Samsung Electronics' overall sales were $59.1 billion (57.5 trillion won), flat from 2004. Profits were $7.8 billion (7.64 trillion won) in 2005, down 29 percent from 2004.

The semiconductor unit said its sales hit $18.8 billion (18.3 trillion won) in 2005, up 1 percent from 2004. Operating profit was $5.6 billion (5.5 trillion won) in 2005, down 27 percent from 2004.

For 2006, Samsung Electronics projects that its sales will reach $65.3 billion (63.6 trillion won), up 11 percent over 2005. The company expects a flat year in DRAMs, but it also projects that NAND will grow by 200 percent in terms of bits.

Overall capital spending is projected to hit $9.5 billion (9.2 trillion won), down 8 percent in 2005.

- Mark LaPedus
EE Times