Samsung sees Q1 operating profit fall to $2.67 bn

April 7, 2011

, SEOUL, Apr 7 – South Korea\’s Samsung Electronics on Thursday forecast operating profit would fall more than a third in the first quarter to about 2.9 trillion won ($2.67 billion) due to weaker global demand.

Samsung, the world\’s largest maker of memory chips and flat-screen televisions, forecast sales of 37 trillion won in January-March.

It released its earnings guidance, which does not include a net profit estimate, before official first-quarter results later this month.

The estimated operating profit represents a 34 percent fall from the figure in the first quarter of 2010.

It guidance did not elaborate on the performance of each division, but analysts said it probably reflects weakness in the flat panel and television sectors.

The global electronics giant achieved a record second-quarter operating profit of 5.01 trillion won last year but its earnings have been falling since then.

The liquid crystal display division, which makes TVs and consumer goods, saw a sharp squeeze in margins around the end of last year because of weaker demand, especially in Europe and the United States.

Analysts cited by Dow Jones Newswires said earnings likely bottomed out in the first quarter and would rise throughout the year.

They said the upcoming release of a new smartphone and an upgraded version of Samsung\’s tablet computer, as well as components used for those products, were expected to boost sales.

New TV models were also forecast to swell revenue, along with a rise in prices for DRAM chips used mainly for personal computers and for NAND flash memory chips.

Last month\’s Japanese earthquake and tsunami, which disrupted production, could also benefit Korean chipmakers. Memory-chip prices have risen steadily since the March 11 disasters on supply concerns.

But any extended shutdown in Japan could disrupt global supplies of components and damage all manufacturers.

Samsung Electronics shares ended down 1.52 percent at 909,000 won.


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