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178748
Fri, 04/29/2011 - 05:25
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https://www.oananews.org//node/178748
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Samsung Q1 net misses estimates on weak TV demand
(ATTN: RECASTS headline, lead; ADDS more details)
By Lee Youkyung
SEOUL (Yonhap) - Samsung Electronics Co., the world's top memory chip and liquid crystal display (LCD) panel maker, reported Friday lower-than-expected earnings for the first quarter as weak demand for TVs and PCs eroded component prices.
Net profit reached 2.78 trillion won (US$2.59 billion) in the January-March period, a 30.3 percent decline from 3.99 trillion won during the same period a year earlier, the company said in a regulatory filing.
The first-quarter bottom line was lower than a market consensus of 2.9 trillion won, according to analysts polled by Yonhap Infomax, the financial news arm of Yonhap News Agency.
Sales rose 6.8 percent on-year to 36.99 trillion won in the three-month period, while operating profit dropped 31.9 percent to 2.95 trillion won, which was in line with Samsung's earnings guidance released earlier this month.
Shares of Samsung Electronics were trading at 893,000 won on the Seoul bourse as of 10:00 a.m., down 0.78 percent from the previous session.
The tech heavyweight's operating profit hit the lowest level in seven quarters and dropped for three straight quarters as global tech companies grappled with weak consumer demand for PCs and TVs amid higher competition and jumping costs.
"A difficult business environment remained in the first quarter, due to rising costs of raw materials, uncertainties in the financial market in Europe, and the devastating earthquake in Japan," said Robert Yi, head of Samsung's investor relations team.
Sluggish consumer demand for flat-screen TVs and personal computers battered prices of components, such as LCD panels and computer memory chips. Panel and semiconductor business accounted for 42 percent of Samsung's revenues in the quarter.
The company's display panel business, which supplies flat-screen panels for TV makers, including Sony Corp., and mobile and PC makers, posted an operating loss of 230 billion won in the three-month period. Its digital media division that produces TVs and home appliances earned 100 billion won.
Worldwide PC shipments declined 3.2 percent on-year in the January-March period, market research firm IDC said, compared with the firm's forecast of 1.5 percent growth. Microsoft Corp. reported Thursday that its revenue from Windows PC software division slid 4 percent.
As global tech companies including Samsung battle weak PC demand, they are turning their eyes to the booming mobile market.
Samsung's semiconductor division and its mobile business rode on the brisk demand for smartphones and other high-end handheld devices.
South Korean chipmakers, including Samsung's smaller rival Hynix Semiconductor Inc., beefed up their products for servers, graphics, smartphones and tablet computers to offset diminishing PC demand.
Samsung's mobile division sold 70 million units of mobile phones in the three-month quarter, and 18 percent of the units were smartphones like the company's flagship Galaxy series.
Samsung forecasts that challenging business conditions will persist in the second quarter, affected by lingering worries over the global economy and tight competition in consumer electronics and mobile business.
Sales of flat-panel TVs are expected to remain slow in advanced countries and demand for LCD panels will begin to gather momentum in the latter part of the second quarter, Samsung said in a statement.
By Lee Youkyung
SEOUL (Yonhap) - Samsung Electronics Co., the world's top memory chip and liquid crystal display (LCD) panel maker, reported Friday lower-than-expected earnings for the first quarter as weak demand for TVs and PCs eroded component prices.
Net profit reached 2.78 trillion won (US$2.59 billion) in the January-March period, a 30.3 percent decline from 3.99 trillion won during the same period a year earlier, the company said in a regulatory filing.
The first-quarter bottom line was lower than a market consensus of 2.9 trillion won, according to analysts polled by Yonhap Infomax, the financial news arm of Yonhap News Agency.
Sales rose 6.8 percent on-year to 36.99 trillion won in the three-month period, while operating profit dropped 31.9 percent to 2.95 trillion won, which was in line with Samsung's earnings guidance released earlier this month.
Shares of Samsung Electronics were trading at 893,000 won on the Seoul bourse as of 10:00 a.m., down 0.78 percent from the previous session.
The tech heavyweight's operating profit hit the lowest level in seven quarters and dropped for three straight quarters as global tech companies grappled with weak consumer demand for PCs and TVs amid higher competition and jumping costs.
"A difficult business environment remained in the first quarter, due to rising costs of raw materials, uncertainties in the financial market in Europe, and the devastating earthquake in Japan," said Robert Yi, head of Samsung's investor relations team.
Sluggish consumer demand for flat-screen TVs and personal computers battered prices of components, such as LCD panels and computer memory chips. Panel and semiconductor business accounted for 42 percent of Samsung's revenues in the quarter.
The company's display panel business, which supplies flat-screen panels for TV makers, including Sony Corp., and mobile and PC makers, posted an operating loss of 230 billion won in the three-month period. Its digital media division that produces TVs and home appliances earned 100 billion won.
Worldwide PC shipments declined 3.2 percent on-year in the January-March period, market research firm IDC said, compared with the firm's forecast of 1.5 percent growth. Microsoft Corp. reported Thursday that its revenue from Windows PC software division slid 4 percent.
As global tech companies including Samsung battle weak PC demand, they are turning their eyes to the booming mobile market.
Samsung's semiconductor division and its mobile business rode on the brisk demand for smartphones and other high-end handheld devices.
South Korean chipmakers, including Samsung's smaller rival Hynix Semiconductor Inc., beefed up their products for servers, graphics, smartphones and tablet computers to offset diminishing PC demand.
Samsung's mobile division sold 70 million units of mobile phones in the three-month quarter, and 18 percent of the units were smartphones like the company's flagship Galaxy series.
Samsung forecasts that challenging business conditions will persist in the second quarter, affected by lingering worries over the global economy and tight competition in consumer electronics and mobile business.
Sales of flat-panel TVs are expected to remain slow in advanced countries and demand for LCD panels will begin to gather momentum in the latter part of the second quarter, Samsung said in a statement.
