Samsung posts first net loss, but handset sales are up

Samsung Electronics posted a quarterly loss in the fourth quarter--the first quarterly loss since it started reporting quarterly earnings in 2000. A drop in demand amid the recession hit Samsung's components business and caused a steep drop in profits in its handset business.

The company posted a $14.4 million loss, compared to a $2.4 billion profit the company had in the fourth quarter of 2007, a sign that even the strongest electronics and handset firms are being hit by a global drop in demand and weakening economic conditions.

Samsung, which is second only to Nokia in terms of handset volume sales, shipped 53 million units in the quarter, up from 46.3 million in the year-ago period and up sequentially from 51.8 million units in the third quarter of 2008. The company shipped around 200 million units in total in 2008, but the handset division's operating profit for the quarter was $116.4 million, down 72 percent from the year-ago period.

The company's handset division is in a relatively strong position compared to much of the competition, and plans on launching a phone based on Google's Android platform in the first half of 2009. However, the company is not immune to the forces shaking the handset makers. The company recently announced that it would reorganize its business into two divisions. One division will be focused on consumer products such as cell phones and televisions and the other on components such as memory chips.

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