South Korea’s Samsung Electronics yesterday forecast operating profit would fall more than a third in the first quarter of this year to about 2.9 trillion won (US$2.67 billion) as a result of weaker global demand.
Samsung, the world’s largest maker of memory chips and flat-screen televisions, forecast sales of 37 trillion won in from January to last month.
The company released its earnings guidance, which does not include an estimate of net profits, before official first-quarter results later this month.
The estimated operating profit represents a 34 percent fall from the figure recorded in the first quarter of last year.
Although the guidance did not detail the performance of each division, analysts said it probably reflected weakness in the flat panel and television sectors.
The global electronics giant achieved a record second-quarter operating profit of 5.01 trillion won last year, but its earnings have been falling since then.
The liquid crystal display division, which makes TVs and consumer goods, saw a sharp squeeze in margins around the end of last year because of weaker demand, especially in Europe and the US.
Analysts cited by Dow Jones newswires said earnings likely bottomed out in the first quarter and would rise throughout the year.
They said the upcoming release of a new smartphone and an upgraded version of Samsung’s tablet computer, as well as components used for those products, were expected to boost sales.
New TV models were also forecast to swell revenue, along with a rise in prices for DRAM chips used mainly for personal computers and for NAND flash memory chips.
Last month’s earthquake and tsunami in Japan, which disrupted production, could also benefit Korean chipmakers.
Memory-chip prices have risen steadily since the March 11 disasters on supply concerns, but any extended shutdown in Japan could disrupt global supplies of components and damage all manufacturers. Samsung Electronics shares ended down 1.52 percent at 909,000 won.
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