SEOUL: Technology giant Samsung Electronics Co reported yesterday a near-quadrupling in net profit for the fourth quarter on strong mobile phone sales and announced bold investment plans in the face of a “very uncertain” outlook for 2003.
Still, the results of the world’s top memory chip manufacturer and third largest handset maker missed profit and sales expectations, in part because its earnings were hit by special employee performance bonuses amounting to 375 billion won (US$300mil).
“The numbers were disappointing,” said Seo Jung-ho, a fund manager at Daehan Investment Trust Management. “Some were even expecting a positive earnings surprise. We will now keep a close eye on its first-quarter performance.”
Samsung’s stock, South Korea’s largest issue with a market value of about US$43bil, initially fell on the earnings announcement, but later recovered to close 1.9% higher at 330,000 won. Analysts attributed the turnaround to the company’s forecast of a 12% jump in handset sales in the first quarter.
Samsung made 1.5 trillion won in net profit for the three months ended Dec 31, 2002, compared with 403 billion a year earlier. Turnover was 10.72 trillion won, versus 8.5 trillion previously. Analysts had forecasting 1.8 trillion won in net profit on sales of 10.9 trillion won.
Showing confidence in future business conditions, the company said it would increase capital spending by 43% to 6 trillion won this year. The investments are slated mostly for its semiconductor business and contrast sharply with a planned 25% cut in spending by top micro-processor maker Intel Corp. – Reuters