Samsung Electronics Co., the world's largest memory chip maker and a major consumer electronics company, said yesterday that third-quarter profit declined 30 percent amid lower chip prices and because it set aside funds to pay an antitrust fine in the US.
South Korea's biggest company by market capitalization said it earned 1.88 trillion won (US$1.8 billion) in the three months ended Sept. 30, down from 2.69 trillion won in the same period a year earlier.
The third-quarter result was worse than expectations. A survey of 10 analysts by Dow Jones Newswires predicted Samsung's profit would total 1.97 trillion won.
The earnings report came a day after US federal officials in Washington said Samsung will pay a US$300 million fine to settle accusations it secretly conspired with industry rivals to fix prices and cheat customers.
Samsung Senior Vice President Chu Woosik told investors on a conference call in Seoul yesterday that net profit would have been higher were it not for setting aside about 200 billion won to pay the fine. The company had previously set aside US$100 million.
"If you exclude that, net profit would have gone over 2 trillion [won]," he said.
Sales during the quarter rose 1.4 percent to 14.54 trillion won from 14.34 trillion won a year earlier, the company said.
Prices for Samsung's mainstay businesses -- chips, mobile phones and liquid crystal displays used in computer monitors and televisions -- peaked in the first half of last year. Profit margins in the industry have since been eroded by a global oversupply of dynamic random access, or DRAM, chips and LCDs, and stiffer competition in the mobile phone business.
Samsung is the biggest producer of DRAM and NAND flash memory chips in the world. It is the second-largest semiconductor maker after Intel Corp and is also one of the largest makers of LCDs along with domestic rival LG.Philips LCD Co.
Samsung's guilty plea to a felony price-fixing charge caps a three-year investigation by the Justice Department into makers of the chips, a US$7.7 billion market in the US.
The Justice Department's acting antitrust chief, Thomas Barnett, said seven Samsung employees are not legally protected from further prosecution under the plea agreement, an indication they may individually face criminal charges.
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