SEOUL, South Korea - Samsung Electronics Co. said Tuesday that its fourth-quarter net profit fell 6.6 percent amid sharp declines in prices for computer memory chips, though sales of mobile phone handsets surged to a record.
Samsung Electronics, the world's largest manufacturer of computer memory chips, earned 2.212 trillion won ($2.36 billion) in the three months that ended Dec. 31, the company said in a statement. Samsung posted net profit of 2.368 trillion won in the same period a year earlier.
As the results were being released, South Korea special prosecutors were raiding the Seoul headquarters of Samsung Group, the conglomerate that Samsung Electronics anchors.
Investigators are probing allegations by a former Samsung Group lawyer that the conglomerate set up a slush fund to bribe prosecutors, government officials and others. Samsung has denied the allegations.
Samsung's financial results, though marking its fourth net profit decline in the past five quarters, were better than expected. The average estimate of nine analysts surveyed by Dow Jones Newswires forecast that Samsung would post a net profit of 1.97 trillion won ($2.1 billion).
Investors sent Samsung's share price 2.5 percent higher to 538,000 won ($574) in late morning trading.
Sales during the quarter rose 11 percent to a record 17.48 trillion won ($18.65 billion) from 15.68 trillion won a year earlier. The result was better than the 17.09 trillion won ($18.22 billion) forecast by the analysts.
Samsung also is the world's top producer of liquid crystal displays and flat-screen televisions and ranks No. 2 in mobile phones behind Finland's Nokia Corp.
The Suwon, South Korea-based company manufactures both DRAM, or dynamic random access memory, chips used in personal computers, as well as NAND chips used in digital cameras, music players and mobile phones.
Prices for both products have fallen sharply over the past year.
"For DRAM, demand was strong but pricing was weak because of oversupply, essentially," Chu Woo-sik, executive vice president for investor relations, told analysts on a conference call after the earnings were released.
Lee Min-hee, an analyst at Dongbu Securities Co. in Seoul, said industrywide average selling prices for DRAM chips have skidded about 85 percent over the past year amid a supply glut after manufacturers were too optimistic about personal computer demand in 2007.
"The oversupply of chips is still in the distribution channel," he said.
He added, however, that Samsung escaped the worst of that because it has diversified into specialty DRAM chips such as mobile DRAM and graphic DRAM.
Samsung said it sold a quarterly record 46.3 million mobile phone handsets, pushing total sales for 2007 to more than 161 million. Phones have been a bright spot for Samsung, which last year surpassed Motorola Corp. of the United States as the world's second-largest manufacturer.
Samsung said it expects to sell 200 million handsets in 2008.
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