Samsung today announced a 30 percent dip in first-quarter profits over the same quarter in 2010. The Korean electronics company said falling chip prices and slowing profits on displays led to the drop in earnings.
Samsung reported total revenues of $34.6 billion on a consolidated basis for the first quarter, a 7-percent increase year-on-year. Net income was down 30 percent year over year to $2.59.
Robert Yi, vice president and head of Samsung Electronics’ investor relations team, said in a statement that rising costs of raw materials, uncertainties in the financial market in Europe, and the devastating earthquake in Japan had all contributed to falling profits.
“But we will actively respond to such challenges by enhancing cost competitiveness in memory products through geometry migration, launching new smartphones and tablet PCs, as well as increasing the sales focus on premium LCD panels and TVs,” he said.
Samsung’s telecom and mobile device businesses fell off slightly as well. The company sold a total of 70 million mobile handsets during the quarter, down 14 percent year-on-year. Still, strong sales of smartphones and high-end mobile devices helped to increase Samsung’s average sales price and boost operating profit.
Samsung has publically set a goal of selling 60 million smartphones in 2011.
On the back of its Galaxy S line, smartphones made up 18 percent of Samsung’s total handset unit sales for the quarter, up from 4 percent during the same period last year.
Samsung put forth guidance that it expects the industry to see single-digit growth in mobile handset demand quarter-on-quarter. The company aims to continue to outperform the market by launching of a range of devices. The company is introducing the new Galaxy S II during the second quarter, with the device slated to be rolled out by 140 mobile service providers in 120 countries.
Samsung will also expand its tablet portfolio with the introduction of the Galaxy Tab 10.1.
Samsung and Apple have been embroiled recently in an escalating legal battle. Apple filed suit against Samsung earlier this month, claiming the Galaxy S line of smartphones and tablets had copied the iPhone and iPad.
Samsung said it was suing Apple in South Korea, Japan and Germany, accusing Apple of patent infringement. The company today also said it had filed another action against Apple, this time in the United States, citing infringements of 10 patents covering mobile telecommunications and user interface technologies.