Blog Post

Earnings: Telco Business Props Up Samsung

Samsung Electronics has released its first quarter earnings for this year, showing a net profit of 1.60 trillion won (US$1.72 billion) on revenue of 14.39 trillion won (US$15.48 billion). Operating profit for the quarter was 1.18 trillion won (US$1.27 billion). This represented a 26.7 percent drop in operating profit year-on-year, due to sluggish semi-conducter and LCD business. This would have been worse if not for Samsungs telecommunications network business. That saw a year-on-year growth of 29 percent in operating profit to 600 billion won (US$645 million) on revenue of 4.6 trillion won (US$4.94 billion). The operating profit margin was 13 percent in the first quarter.
Handsets: Samsung said that robust sales of premium handsets and a solid performance in China helped boost sales to a record of 34.8 million units for the quarter, and the company expects to exceed its annual sale target of 133 million units. However revenue for the handset business was down 2 percent from 4.39 trillion won in Q1 2006 to 4.28 trillion won (US$46 billion). If handset sales are up but revenue is down it indicates it may not be the premium handsets driving growth, but some lower-end handsets.
Earnings Release