Sat, Oct 08, 2011 - Page 10 News List

Samsung tips Q3 operating profit of US$3.52 billion

AFP, SEOUL

Samsung Electronics said yesterday it expects third-quarter operating profit of about 4.2 trillion won (US$3.52 billion), a 13.6 percent fall year-on-year amid weak demand for flat panels and computer chips.

However, the South Korean firm’s forecast exceeded market expectations. Brisk sales of its flagship smartphones were thought to have supported the bottom line.

Samsung Electronics was publishing its earnings estimates before official results later this month. It tipped revenue of about 41 trillion won in the July to September period, a 1.9 percent rise from the third quarter of last year.

For the second quarter of this year, the company reported an operating profit of 3.75 trillion won on sales of 39.44 trillion. Samsung Electronics is the world’s largest maker of flat panels, memory chips and flat-screen televisions and the second--largest mobile phone maker.

It did not give an explanation for yesterday’s estimates or a net profit forecast.

Analysts said falling global demand for personal computers and televisions hit Samsung’s chip and liquid crystal display business, but they said the company would benefit from strong demand for non-memory chips and advanced flat displays, mainly driven by brisk sales of mobile devices, as well as the won’s recent fall against the US dollar.

The core memorychip business is under pressure because of a global oversupply that has pulled down prices.

Kwon Oh-hyun, head of the components division, said last month the chip industry was unlikely to recover this year given global economic uncertainties.

However, the Korean firm is pressing US technology giant Apple hard in the lucrative smartphone business. Apple shipped 20.3 million smartphones worldwide in the second quarter compared to Samsung’s 19.6 million.

Samsung is expected to have passed Apple in the third quarter after pushing sales of its flagship Galaxy S II unveiled in April.

Samsung probably shipped 28.5 million smartphones in the third quarter, Daewoo Securities analyst James Song told Yonhap news agency.

Song estimated that the firm’s mobile communications division posted a record-high operating profit of at least 2 trillion won during the quarter.

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