Samsung Electronics Co, South Korea's largest company, said yesterday its first-quarter net profit rose 26 percent from the year before amid strong demand for large-size flat-screen TVs.
Samsung earned 1.88 trillion won (US$1.95 billion) in the three months ended March 31, the company said in a statement, mostly citing equity gains from the performance of overseas subsidiaries.
The result was better than expected. The average estimate of 10 analysts surveyed by Dow Jones Newswires forecast that the company would post a 17 percent increase in net profit to 1.76 trillion won.
LCD SALES SOARING
Samsung said sales in its liquid-crystal display (LCD), business soared 41 percent to 2.68 trillion won from the year before because of demand for big flat-screen TVs. Operating profit in the division surged more than fourfold.
Samsung makes its own flat-panel TVs and is a major supplier of the liquid-crystal displays used in other manufacturers' TV sets, as well as in laptops and cellphones. It competes with LG.Philips LCD Co for dominance in the market for displays.
Overall operating profit, or sales minus the cost of goods sold, however, slumped 25 percent from the year before amid strength in the South Korean won and falling prices for products including NAND flash memory chips used in digital music players.
Samsung is the world's largest manufacturer of memory chips, including DRAM.
Total sales for the company rose 1 percent to 13.96 trillion won.
Woosik Chu, senior vice president and head of investor relations, said Samsung has shifted its LCD production focus to screens for large-sized TVs amid a seasonal slowdown in demand for personal computers.
"We significantly increased the shipment of 40-inch and above TV panels by 20 percent quarter on quarter," Chu said.
PRODUCT SHORTAGE
"Even with this kind of significant increase in output we are still not able to meet our customers' demand for large TV panels," he said.
Chu, speaking to investors and analysts on a conference call, said South Korea's currency gained about 6 percent in the first quarter from the fourth quarter of last year.
"Such a drastic won appreciation had a negative impact on our revenue and profits," he said.
Chu said that the value of exports at Samsung, which does about 90 percent of business overseas, declined 7 percent from the fourth quarter, adding that when those figures are converted into won, the decline was more like 12 percent.
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