Samsung Achieves Record Cell Phone Sales in Q3

Samsung Electronics Co. Ltd. achieved higher sales and profits in the July to September quarter as cell phone sales hit a record high and the company enjoyed strong demand for its semiconductor and flat-panel display products.

Operating profit was 12 percent higher than the same quarter last year at 2.1 trillion won (US$2.3 billion) and sales rose 10 percent to 16.7 trillion won, Samsung said on Friday.

During the quarter, sales in Samsung's telecommunications sector jumped 8 percent jump to 5.1 trillion won to make it the largest of all Samsung's business divisions by sales. Operating profits advanced 13 percent year-on-year to 600 billion won.

Buoyed by the popularity of its slim-line "Ultra edition" 3G handsets, Samsung said it sold a record 42.6 million cell phones during the quarter. Sales in the first nine months of the year hit 115 million handsets, which is a million handsets more than last year.

For the current quarter, Samsung plans to launch more 3G handsets. Earlier this week it announced three new phones for the European market including one model that includes audio technology from Bang & Olufsen. Samsung expects total sales for the year to be 157 million units.

Samsung's semiconductor business, which is largely focused on DRAM computer memory chips and NAND flash memory chips, had a mixed quarter. Revenues rose 2 percent to 5 trillion won, but operating profits slid 28 percent.

Demand for NAND flash memory used in portable digital consumer electronics remained strong. The company's DRAM business wasn't hit hard by generally unfavorable conditions in the market because of Samsung's concentration on chips tailored for mobile or graphics applications. Such speciality chips were more insulated from price drops than commodity chips.

Looking ahead, the company said it expects conditions to improve during the current quarter.

The LCD business continued to enjoy strong sales thanks to the popularity of flat-screen TVs and computer monitors. The start of production on a new factory line in South Korea helped the business achieve a 34 percent jump in sales to 4 trillion [t] won and a 317 percent jump in operating profits to 0.7 trillion [t] won.

"We are expecting all of our four major businesses to be running at full gear in Q4," said Chu Woosik, executive president of Samsung's investor relations team in a telephone conference call. "Although the DRAM sector may still be a little slow because of supply overhang in the market but we will try to make up for the short fall."

Samsung Q3 Revenue table (in trillions of won)

Q3 2006 Q3 2007 Year-on-year growth (drop)

Semiconductor 4.91 5.01 2%

Memory 3.64 3.58 (2%)

System LSI 0.59 0.74 25%

LCD 3.00 4.02 34%

Telecommunication Network 4.71 5.08 8%

Mobile Phone 4.45 4.80 8%

Digital Media 1.64 1.48 (9%)

Digital Appliance 0.83 0.93 12%

Total Revenue 15.22 16.68 10%

Source: Samsung Electronics Co. Ltd.

Samsung Q3 Operating profit table (in trillions of won)

Q3 2006 Q3 2007 Year-on-year growth (drop)

Semiconductor 1.27 0.92 (28%)

LCD 0.16 0.67 317%

Telecommunication Network 0.52 0.59 13%

Digital Media (0.10) (0.12) -

Digital Appliance (0.01) (0.006) -

Total Operating Profit 1.85 2.07 12%

Source: Samsung Electronics Co. Ltd.