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Samsung Q1 profit beats forecasts, down 72 pct: DRAM prices to fall by mid-40s pct in '09
By Amarendra Bhushan for CEOWORLD Magazine Updated:April 24, 2009
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The world’s largest maker of computer memory chips, Samsung Electronics, predicted that net profit plummeted 72 percent in the first quarter amid prices of DRAM chips would fall by a mid-40s percent in 2009 in the global economic slump.
South Korea’s Samsung earned 619.20 billion won ($463.53 million) in the three months ended March 31, the company said in a regulatory filing. That compares with net profit of 2.19 trillion won a year earlier.
Samsung also predicted NAND flash prices would drop by a high-20s percent this year.
The company said its average handset selling price rose 2 percent from the fourth quarter of 2008 on increased mid- and high-end product sales, although the total volume of sales remained flat compared with a year earlier.
Samsung, which is also the world’s No. 1 maker of liquid crystal display (LCD) screens, said its display division posted a 8 percent loss margin in the first quarter on a parent basis, unchanged from the fourth, Reuters reported.
The company manufactures DRAM, or dynamic random access memory, chips used mostly in personal computers as well as NAND flash memory chips used in digital devices such as cameras and music players.
Net profit for January-March was 619 billion won (462.6 million dollars) compared to 2.19 trillion won a year earlier, the company said in a statement.
Sales rose 8.5 percent to 18.57 trillion won over the period, while operating profit year-on-year fell to 148 billion won from 2.15 trillion.
“Despite the extremely challenging market environment, Samsung made a strong recovery from the fourth quarter of 2008, supported by stabilising semiconductor prices, increased profit margin for mobile phones and careful control of marketing and other expenditure,” the firm said in a statement.
“We think there is room to increase DRAM (dynamic random access memory) prices in the second quarter but (any rise) will not be significant,” Robert Yi, vice president of Samsung Electronics’ investor relations team, told a news conference.
Net income was more than 11 times higher than the median estimate in a Bloomberg survey of 20 analysts. Samsung posted an operating profit of 147.6 billion won, compared with the 242 billion won loss projected by the survey, as earnings at the handset division unexpectedly rose. Release in PDF
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