Samsung
The global economic recovery will probably stimulate demand for TVs, mobile phones and computers, Suwon, South Korea-based Samsung said today, after reporting annual profit jumped 75 percent to a five-year high of 9.65 trillion won ($8.3 billion). Demand for chips and liquid-crystal displays will be “strong” throughout 2010, it said.
Sales climbed to a record last quarter as Samsung joined Microsoft Corp. and Nokia Oyj among major technology companies reporting higher earnings this week. Choi Gee Sung, promoted to chief executive officer last month, faces the challenge of defending Samsungs market share as competition intensifies in TVs from companies including Sony Corp. and in the mobile- handset market from the likes of iPhone-maker Apple Inc.
“Chip prices will probably remain strong, which should be really good for Samsung Electronics,” said Chang In Whan, president of KTB Asset Management Co. in Seoul, which manages the equivalent to $8.6 billion in assets. “But I see intensifying competition in the LED TV and mobile-phone markets.”
Samsung, which climbed 77 percent last year, fell 2 percent to 792,000 won at 1:01 p.m. on the Korea Exchange, while the benchmark Kospi stock index lost 1.4 percent.
Fourth-Quarter Profit
The companys fourth-quarter net income was 3.05 trillion won, swinging from a loss of 22.2 billion won a year earlier. Redmond, Washington-based Microsoft yesterday reported profit and revenue that topped analysts estimates, while Intel Corp., the worlds largest maker of semiconductors, this month forecast higher sales than analysts estimated.
Samsungs net income will be a record 12.7 trillion won this year, according to the median estimate of 39 analysts compiled by Bloomberg.
The company said its “seriously” reviewing increasing investment for memory chips this year, from its original plan to spend about 5.5 trillion won, to meet rising demand.
“We see this positive growth and performance flowing on into 2010 as the global economy continues to stabilize,” Robert Yi, head of Samsungs investor relations, said in a statement.
Profit at Samsungs semiconductor division was 1.7 trillion won, compared with a loss a year earlier, as prices rose. Micron Technology Inc. and Hynix Semiconductor Inc., which compete against Samsung in computer memory, both reported their highest profit in at least two years for the most recent quarter.
Stronger Computer Demand
At the LCD business, Samsung reported a profit of 530 billion won from a year-earlier loss, driven by TV demand. LG Display Co., the second-largest LCD maker after Samsung, last week reported profit and sales that beat estimates and forecast higher prices for the current quarter.
Samsungs digital media division, which makes TVs, posted a profit of about 470 billion won, as the company increased sales of more expensive models using light-emitting diodes as screen backlights. That compares with the 615 billion won median estimate in the analyst survey.
35 Million Sets
Global shipments of LCD TVs will rise 22 percent to 171 million units in 2010, Austin, Texas-based research firm DisplaySearch said last month. Samsung, the worlds largest TV maker, said Jan. 7 it expects to sell 35 million LCD sets this year, while LG Electronics Inc., the second-ranked, plans to ship 25 million in 2010.
Samsung aims to sell 10 million LED TVs this year and 2 million 3-D models, it said.
Mobile-phone shipments climbed 31 percent to a record 68.8 million, helping income at the telecommunications division rise sevenfold to about 990 billion won, beating the 742 billion won median estimate in a Bloomberg survey of 21 analysts.
Earnings at the mobile-phone operations echoed results at competitors such as Nokia and LG Electronics as shipments in the handset industry rose an estimated 10 percent, the first increase since the third quarter of 2008.