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Samsung posts $15.8B revenue for Q3

Posted: 17 Oct 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Samsung Electronics? Q3 revenue? NAND? LCD? memory IC?

Samsung Electronics Co. Ltd posted net income of $2.28 billion on revenue of $15.88 billion for Q3, ended Sept. 30, 2006. Operating income for the quarter was $1.9 billion.

"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 to increase capacity of our memory-chip business is expected to create revenue opportunities next year," said Dr. Woosik Chu, senior vice president and head of Samsung's investor-relations team.

Operating profit of the semiconductor business reached $1.32 billion on revenue of $5.13 billion in Q3. It increased 29.5 percent from the previous quarter, mainly due to strong demand of flash memory chip for automotive apps" target=_blank>memory chips from the PC sector, the company said.

In the memory-chip business, Samsung capitalized on the global shortage in supply of DRAM chips that subsequently led to a surge in DRAM prices. A timely redeployment of production from slower-growth products and strengthening higher-growth, premium products such as DDR2, enhanced profit margins by 3.7 percentage points from the previous quarter.

The memory business is expected to see further growth and higher returns in Q4. The price of DRAM chips is expected to remain strong in the last quarter, and the demand of NAND flash memory chips is expected to grow with the introduction of new products that require larger memory such as MP3s, PMPs, and handsets.

Meanwhile, telecommunication network business posted revenue of $4.92 billion, and operating income of 544 million. In Q3, robust sales of the "Ultra Edition" premium handsets in Europe helped boost sales to a record 30.7 million units and double-digit profit margins of 11.1 percent. The company expects both the volume of sales and average sales price to see significant improvement with the launching of 3G "Ultra Edition" handsets in various form factors and multimedia handsets.

The LCD business reported revenue and operating income of $3.13 billion and $167 million, respectively. Prices of IT panels recovered ahead of the seasonally-robust period and sales of 40-inch and larger TV panels remained strong. The company sold 3 million units of LCD TV panels, of which sales of 40-inch and larger TV panels amounted to 1.6 million units. Samsung plans to boost monthly production capacity of its Line 7 to an additional 150,000 units in the Q4, a busy selling season.

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