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Samsung posts a record profit as DRAM recovers

Samsung Electronics Co, the world's largest maker of computer-memory chips, posted a record first-quarter profit, buoyed by higher mobile-phone sales and a price surge of more than half for its main product.

Net income rose to 1.9 trillion won (US$1.4 billion) from the 1.2 trillion won in the year-earlier period, exceeding the record 1.6 trillion won posted in the first quarter of 2000. The results were better than the average 1.47 trillion won profit forecast from five overseas brokerages surveyed by Bloomberg News.

Samsung's earnings are rebounding faster than those of rivals such as Hynix Semiconductor Inc because the company is able to make chips at lower cost. The chipmaker, which leapt into fourth place last year among the world's mobile-phone makers, is also being helped by its telecommunications business.

"The figures are very good and better than expected, particularly their telecom business," said Kim Gee-soo, who has a "buy" recommendation on the stock at Nomura Securities Co in Seoul.

Samsung's shares rose as much as 1.7 percent after the earnings announcement to 413,500 won, bringing gains the past five days to 12 percent. The shares have risen 46 percent since Jan. 1, outperforming the Bloomberg Asia Pacific Semiconductors Index's 16 percent increase.

The company's earnings were helped by an operating profit of 990 billion won at its chip unit and sales of 9.5 million mobile phones in the three-month period.

Operating profit at Samsung's communications division almost doubled to 800 billion won from the previous quarter, based on sales of handsets with advanced functions and unique designs.

Profit margins from cell phones are above 27 percent, it said.

Samsung said it is upbeat about its performance for 2002.

The company raised its spending plans on new equipment to 4.55 trillion won from 3.05 trillion won. Corporate computer sales are also expected to pick up in the third quarter, it said.

Regarding the memory-chip business, Samsung said the market for dynamic random-access memory chips will "correct" itself in the second quarter. Still, the company said it doesn't see any "fundamental recovery" in the market for personal computers.
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