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Samsung’s profits rise 37% on strong handset, LCD sales

Samsung Electronics said yesterday that net profit jumped 37 percent in the first quarter amid strength in mobile phones and flat-screen televisions.

Samsung earned 2.19 trillion won (US$2.2 billion) in the three months ended March 31, compared with 1.6 trillion won in the same period last year, the company said in a statement to South Korea’s financial regulator.

Revenue rose 19 percent to 17.11 trillion won, the company said.

Investors cheered the news, pushing Samsung shares up 4.4 percent to 690,000 won in late morning trading.

mobile phones

Samsung said in a separate statement that mobile phone sales “achieved similar volume” to the fourth quarter’s record sales of 46.3 million handsets, despite an approximately 13 percent contraction in the global market.

“Our handset business is growing very strong,” Chu Woo-sik, executive vice president for investor relations, told analysts on a conference call.

Chu cited growth of 33 percent year-on-year. Emerging markets, including China and India, “continued to be the main driver of growth.”

Samsung’s mainstay semiconductor business saw sales decline 2 percent from the same period last year.

weak pricing

The IC business suffered amid weak pricing owing to supply increases and slow seasonality, Chu said.

Slow seasonal demand for personal computers hurt sales of dynamic random access memory (DRAM) chips, Chu said.

Samsung is the world’s largest manufacturer of computer memory chips and liquid crystal displays (LCD) and is the world’s second-largest producer of mobile phones behind Finland’s Nokia Corp.

Weakness in the South Korean won, which skidded to two-year lows against the US dollar during the first quarter, also boosted earnings, Samsung said.

Samsung said that it sold more than 1 million LCD panels for flat screen TVs measuring more than 46 inches and above.

LCD sales, which jumped 53 percent on year, were “aided by the favorable currency exchange rate,” the company said in its statement.

Samsung also said it would spend more than 11 trillion won on capital investments in memory chips and LCDs.

Sony

Separately, Samsung and Japan’s Sony Corp announced they had signed a contract to expand production of LCDs at their joint-venture manufacturing facility in South Korea to meet global demand for televisions.

Production is targeted to begin in the second quarter of next year, the companies said in a statement released by Samsung.
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