Samsung Sees Record Q1 Operating Profit

The world's largest maker of memory chips and flat screen TVs saw a $3.83 billion profit in the first quarter.

Samsung Electronics on April 6 predicted a 19% year-on-year rise in first-quarter sales and a record operating profit, indicating a strong recovery in the consumer electronics industry.

The company, the world's largest maker of memory chips and flat screen TVs, forecast a consolidated operating profit of 4.3 trillion won (US$3.83 billion) in the January-March period.

The firm, giving earnings guidance before its official first-quarter results later this month, estimated first-quarter consolidated sales at 34 trillion won -- compared to 28.67 trillion in January-March 2009.

The predicted consolidated operating profit would be the largest quarterly figure ever, topping the 4.23 trillion won last July-September.

Analysts attributed the bullish figures to strong sales and improved prices for memory chips as well as the continued rise in prices for liquid crystal displays. "For the first quarter, Samsung's operating profit from its chip business has accounted for around 46% of the total profit," Y.S. Hwang, an analyst at SK Securities, told Dow Jones Newswires.

"DRAM chip supply shortage is likely to continue at least until the third quarter, which will help chip prices to remain firm. Samsung's sales and operating profit are expected to sustain their rise until the third quarter of this year," Hwang added.

Analysts said Samsung's LCD business was also expected to remain buoyant due to strong sales of flat-screen televisions using a light emitting diode, or LED, backlight.

Copyright Agence France-Presse, 2010

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