For the fourth quarter, the sharp fall in flat panel prices pushed net profit down 1.6% to KRW1.83 trillion ($1.75 billion) from KRW1.86 trillion ($1.78 billion) a year ago. Sales, however, rose 7.8% to KRW13.89 trillion ($13.31 billion).
For the year ending December 31, net income rose 81% to KRW10.78 trillion ($10.34 billion) while sales rose to KRW57.632 trillion ($55.25 billion).
The market reacted positively to the results, and on the Korean Stock Exchange its shares rose 6.2% to KRW471,500 ($452.06) as of 3.30pm GMT, Friday.
Yet while the results were better than the market had expected, there are some clouds on the horizon. As competition intensifies, profit is expected to fall by about a quarter this year.
The South Korean electronics giant is also the world’s biggest maker of liquid-crystal displays, and its operating profit dropped by 42% as the industry is locked in the grip of savage price competition, which saw a price cut of 10% to 14% for its large size flat panels. The LCD channel is awash with excess inventory, as many consumers refuse to see the advantages associated with a LCD television, especially considering its very high purchase cost.
Additionally, Samsung is the world’s second biggest mobile phone maker, and here it has been hurt by falling mobile phone margins, especially after the price war, sparked by industry leader Nokia, which forced Samsung to spend more cash on marketing its phones. Samsung said it shipped 21.1 million phones in the fourth quarter, down from the third quarter’s 22.7 million.
Samsung is targeting sales of 100 million mobile handsets in 2005, a rise of 16% on 2004.
