Samsung Sees First-Ever Quarterly Loss - InformationWeek

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1/26/2009
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Samsung Sees First-Ever Quarterly Loss

Plunging sales of appliances, liquid crystal displays, and memory chips led to Samsung reporting its first-ever quarterly loss of about $14.4 million.

Samsung is the latest consumer electronics company to be hit by the global economic slowdown, and it reported its first-ever quarterly loss

Due to decreased demand and sales of appliances, liquid crystal displays, and memory chips, Samsung posted a net loss of about $14.4 million for the fourth quarter of 2008. This is a stark contrast from the $1.59 billion profit it made for the same period last year, and the $863 million profit for the third quarter.

"The global economic slowdown had an adverse effect on consumer purchases of electronics goods in the fourth quarter, traditionally a strong period for electronics companies," the company said in a release.

The company is still the second largest cell phone manufacturer, trailing only Nokia, and it shipped 52.8 million handsets for the quarter. This represents a 14% rise from the same period last year, and Samsung shipped about 196.6 million units for the whole year. The company had success with touch-screen handsets like the Omnia, and its midlevel camera phones sold well in emerging markets.

But Samsung saw consumer demand dip for the mobile phone division, and the company is expecting that to continue for the year. Like other companies and industry watchers, Samsung is expecting the handset market to decline 5% to 10%, and it expects the first quarter to be especially hard hit.

Samsung previously operated separate divisions for chips, LCDs, cell phones, and consumer electronics, but it said it would reorganize into two major divisions to combat the slumping economy. Samsung will consolidate its businesses into a digital media and communications division that focuses on consumer products such as cell phones and televisions, and a device solution division that handles displays and memory chips.

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