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Samsung forecasts record operating profit in second quarter.

Summary: SEOUL: Samsung Electronics Co. forecast Wednesday that operating profit rose to a record high in the second quarter on what analysts said were strong sales of computer memory chips and liquid crystal displays. The Suwon, South Korea-based company said it expects consolidated operating profit of between 4.8 trillion won and 5.2 trillion won ($4.2 billion) for the three months ended June 30

SEOUL: Samsung Electronics Co. forecast Wednesday that operating profit rose to a record high in the second quarter on what analysts said were strong sales of computer memory chips and liquid crystal displays.

The Suwon, South Korea-based company said it expects consolidated operating profit of between 4.8 trillion won and 5.2 trillion won ($4.2 billion) for the three months ended June 30, according to a statement. That would beat the company's previous all-time high of 4.41 trillion won set in the first quarter.

Samsung, a major force in the global electronics industry, is the world's biggest seller of computer memory chips, liquid crystal displays and flat-screen televisions. It ranks No. 2 in mobile phone handsets after Finland's Nokia Corp.

The company gave no reason for the quarterly performance and will formally announce second-quarter earnings at the end of this month, according to spokesman Jason Kim.

Samsung does not release net profit forecasts.

The company recorded net profit of 2.25 trillion won in the second quarter of 2009, a figure based on South Korean accounting standards, according to spokesman James Chung.

Samsung adopted international financial reporting standards, or IFRS, from the first quarter of this year.

Lee Min-hee, an analyst at Dongbu Securities in Seoul, forecast that Samsung will record second-quarter net profit of 4.2 trillion won.

Operating profit is seen as a direct indicator of business performance before taxes, dividends, asset sales and other items that are figured into net profit or loss.

Analysts said Samsung benefited in the second quarter from strong sales of liquid crystal displays as well as DRAM, or dynamic random access memory, chips used mostly in personal computers.

Seo Won-seok, of NH Investment & Securities in Seoul, estimated that the company's DRAM profit margin exceeded 40 percent.

The outlook for extending its record operating profit performance the rest of this year was uncertain.

"Many investors doubt that this trend is sustainable in the second half as the global economy slows down," said Lee of Dongbu Securities. -- AP

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Publication:The Daily Star (Beirut, Lebanon)
Article Type:Financial report
Geographic Code:9SOUT
Date:Jul 8, 2010
Words:419
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