Samsung Electronics, the world’s largest manufacturer of flat screen televisions, memory chips and liquid crystal displays, posted its first ever quarterly loss yesterday as the global economic slump hit prices and demand for mainstay products.
Samsung lost 20 billion won (US$14.37 million) in the three months ended on Dec. 31, the company said in a statement. Samsung posted 2.21 trillion won in net profit a year earlier.
The net loss was Samsung’s first since the company began reporting results on a quarterly basis in 2000 and underlines the challenges facing electronics companies worldwide as major economies flounder in recession.
PHOTO: AFP
The Suwon, South Korea-based company has struggled with falling prices for chips and flat screens, as well as the waning consumer appetite that has hit other Asian electronics manufacturers including Japanese giant Sony Corp.
On Thursday, Sony projected its first annual loss in 14 years, while South Korea’s LG Electronics Inc reported a record quarterly net loss. Japan’s Panasonic Corp said earlier this month it would slash about US$1.5 billion from its planned investment in two new flat-screen TV plants and shut down unprofitable businesses.
The results showed that “our company could not escape the rapid decline in the global economy,” Samsung’s Robert Yi, vice president for investor relations, told a conference call.
The result wasn’t as bad as the net loss of 92.93 billion won forecast by an Associated Press survey of 10 analysts. But on an operating basis, the company racked up red ink to the tune of 940 billion won, much worse than the forecast of a loss of 319 billion won. That loss was also a first.
Operating earnings are seen as a direct indicator of core business performance, while net profit or loss also reflects taxes, dividends, asset sales and other items.
“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,” Samsung said in the release.
Fourth quarter sales rose to 18.45 trillion won from 17.48 trillion won the year before, but less than the 20 trillion won expected by analysts.
Samsung shares fell 3.5 percent to 445,000 won in afternoon trading. The company announced results less than one hour after the stock market opened.
On the bright side, Samsung said mobile phone sales rose to a record during the quarter despite a 5 percent contraction in the global market for handsets. The company is the world’s No. 2 mobile phone manufacturer.
Samsung announced a major restructuring last week, consolidating business operations into two divisions. This week the company said it had replaced most of the heads of its overseas regional headquarters.
It also announced the redeployment of more than 80 percent of the almost 1,400 employees at its Seoul headquarters.
Tropical Storm Usagi strengthened to a typhoon yesterday morning and remains on track to brush past southeastern Taiwan from tomorrow to Sunday, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, the storm was approximately 950km east-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost point, the CWA said. It is expected to enter the Bashi Channel and then turn north, moving into waters southeast of Taiwan, it said. The agency said it could issue a sea warning in the early hours of today and a land warning in the afternoon. As of 2pm yesterday, the storm was moving at
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
UPDATED FORECAST: The warning covered areas of Pingtung County and Hengchun Peninsula, while a sea warning covering the southern Taiwan Strait was amended The Central Weather Administration (CWA) at 5:30pm yesterday issued a land warning for Typhoon Usagi as the storm approached Taiwan from the south after passing over the Philippines. As of 5pm, Usagi was 420km south-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost tip, with an average radius of 150km, the CWA said. The land warning covered areas of Pingtung County and the Hengchun Peninsula (恆春), and came with an amended sea warning, updating a warning issued yesterday morning to cover the southern part of the Taiwan Strait. No local governments had announced any class or office closures as of press time last night. The typhoon
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