SEOUL: Samsung Electronics Co Ltd, Asia's most valuable electronics company, said yesterday its quarterly profit almost trebled to a record on roaring demand for chips, handsets and flat screens, and forecast a solid second quarter.
But its shares fell 2.8% as investors pocketed profits after a rally that took Samsung to record highs this week and worried about a slacker second half on an expected drop in flat screen prices and an uncertain outlook for memory chip prices.
Samsung benefited from an unexpected spike in prices of computer memory chips and booming sales of fancy photo-snapping handsets. Investors had already expected a strong performance of Samsung's flash memory chips, popular in digital cameras, and flat screens to drive 2004 earnings.
The record results from the world's biggest memory chipmaker followed solid earnings by its US peers this week, including a tripling of quarterly profit at Texas Instruments. Advanced Micro Devices and Intel Corp also reported strong quarterly results, although Intel forecast sales would dip this quarter.
“We think the net profit figure is solid and its second-quarter profit is expected to be even stronger,” said Sohn Dongshik, chief fund management officer and managing director at Mirae Asset Investment and Management Co.
“But we need to be a bit cautious in respect of second-half earnings because prices of DRAM (dynamic random access memory) and LCD may turn downwards,” Dongshik said.
Samsung, the world's third largest mobile phone producer, earned 3.14 trillion won (US$2.72bil) in net profit for the first quarter to March 31, slightly better than analysts' forecast for 3.03 trillion. The figure was up 178% from a year ago.
Turnover was 14.4 trillion won versus 9.6 trillion previously.
Samsung is likely to ring up 11.66 trillion won in net profit this year, almost double the 5.96 trillion won in 2003, according to Reuters Research.
“We expect strong second-quarter results on global economic expansion and a stable business structure,” Samsung said in a statement. – Reuters
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