r key products including flash memory chips and liquid crystal displays. South Korea's largest company earned 2.35 trillion won (US$2.5 billion; euro1.94 billion) in the three months ended Dec. 31, the company said in a statement.
The result was slightly better than expected. The average estimate of 11 analysts surveyed by Dow Jones Newswires forecast that Samsung would post a net profit of 2.33 trillion won (US$2.47 billion; euro1.92 billion). Sales rose 1.1 percent to 15.69 trillion won (US$16.66 billion; euro12.93 billion).
Samsung has grown into a global technology heavyweight, becoming the world's largest memory chip maker and a top producer of flat-screen televisions, mobile phone handsets, MP3 players and laptop computers.
But falling chip prices have hurt the company. The average selling price for its NAND flash memory chips declined 19 percent in the fourth quarter from the third.
Samsung manufactures both DRAM chips used in personal computers, as well as NAND chips used in digital cameras and music players like Apple Computer Inc.'s iPod Nano.
Profit also was hurt by declines in mobile phone prices amid intense competition in the industry and increased marketing expenses in the quarter, which includes the holiday shopping season in North America and Europe.
The strong won also eroded Samsung's earnings by making its products more expensive overseas and lowering the value of income abroad when converted back into won. During the quarter, the U.S. dollar was on average about 9 percent weaker than a year ago. Samsung exports about 80 percent of its products.
Executives at the Suwon, South Korea-based company, were upbeat, however, predicting better performance in 2007 and taking pride in Samsung's dominance in the global television market.
"As a whole we expect the business climate to be better this year," said Chu Woo-sik, senior vice president and head of Samsung's investor-relations team told a conference call.
Samsung, which does not make profit forecasts, said that it expects sales in 2007 to rise 8 percent to 63.6 trillion won (US$67.7 billion; euro52.4 billion).
