×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Samsung has first ever quarterly loss on weak chips

Samsung has first ever quarterly loss on weak chips
Comment E-mail Print Share
First Published: Fri, Jan 23 2009. 11 20 AM IST
Updated: Fri, Jan 23 2009. 11 20 AM IST
Seoul: Samsung Electronics posted its first ever quarterly loss as its memory chip and display units buckled under the weight of diving prices, and the technology giant faces even more pain as global recession saps demand.
Profits at the world’s top maker of memory chips and liquid crystal displays (LCDs) have been mauled by a lengthy downturn in the memory market and a rapid drop in margins for flat screens, along with slowing sales of all consumer electronics.
“It’s a big earnings shock, boding ill for other high-tech players around the world,” said Lee Jeong, an analyst at Hana Daetoo Securities.
Peter Yu, analyst at BNP Paribas in Seoul, predicted the current first quarter would be even worse.
“Across the board, every major business is going to show quarter-on-quarter deterioration. At the moment, the visibility of a turnaround is very low,” he said.
Samsung posted an October-December operating loss of won937 billion ($682 million), showing the impact of ravaged chip and LCD prices. The figure compares to a year-earlier profit of won1.78 trillion and was much steeper than analysts’ forecast for a won452 billion shortfall.
Samsung’s chip unit, which just two years ago posted an operating profit margin of 31%, reported a loss margin of 14%, a much larger deficit than expected. The loss contributed to almost 60 percent of the total operating loss.
Samsung also said the oversupply situation in the memory market would continue through the first half of 2009.
The results came a day after Japan’s Sony Corp warned it would post a record $2.9 billion annual operating loss due to sliding demand and a stronger yen, and unveiled fresh restructuring steps to revive its ailing electronics operations.
Samsung’s October-December net loss was won22.2 billion ($16.16 million), compared with profits of won2.21 trillion a year ago and won1.22 trillion in the previous quarter.
The net loss was much smaller than a consensus for a won256 billion shortfall in a wide range of forecasts by 11 analysts polled by Reuters, helped by higher tax refunds and earnings from overseas affiliates.
Overall sales at Samsung rose to won18.45 trillion from won17.48 trillion a year ago.
The losses are Samsung’s first since it started reporting quarterly figures in 2000.
Comment E-mail Print Share
First Published: Fri, Jan 23 2009. 11 20 AM IST