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Saturday, April 25, 2009

Samsung cautious on outlook as profits fall

Samsung Electronics, the world’s biggest maker of memory chips and liquid crystal display screens, remained cautious on the outlook for the year as it revealed a 72% fall in first-quarter profits, in spite of brisk sales of its mobile phones.
The South Korean company said there could be a gradual price recovery of memory chips and flat-panel displays in the second quarter, although it ruled out a big upturn in the short term.

Samsung reported a 72% drop in net profit in the first three months of the year to Won 619.2bn ($463m), which was better than expected, compared with Won 2,187.6bn in the same period a year ago.
The net profit compares with a Won 22.2bn loss in the fourth quarter of last year.

“The global economy is likely to continue to recover in the second quarter but lingering uncertainty means it is difficult to predict a sharp improvement in demand or the business environment in the near term,” said Robert Yi, Samsung’s vice-president in charge of investor relations.

The world’s second-largest handset maker said its telecommunications division reported an operating profit of Won 1,120bn on a consolidated basis, which includes the performance of overseas affiliates.

Samsung reported a profit margin of 11%, higher than industry leader Nokia’s 10.4% and local Korean rival LG Electronic’s 6.7%.

Samsung was the only one of the top four handset makers to report an earnings increase for the division. Sony Ericsson last week reported a loss.

Song Jung-a in The Financial Times Limited 2009

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