Samsung
Second-quarter net income rose 5.2 percent to 2.25 trillion won ($1.8 billion), the Suwon, South Korea-based company said today. Samsung was expected to report a 24 percent profit drop, according to the median estimate of 22 analysts surveyed by Bloomberg News. Sales climbed 16 percent to a record.
Asias largest producer of chips, flat screens and mobile phones said its keeping a cautious view on the second-half earnings outlook as the Korean currency may appreciate and competition may intensify. The won has fallen against all of the regions major currencies in the past year, helping South Korean exporters such as Samsung and Hyundai Motor Co. recover faster than Sony Corp. and Toyota Motor Corp. in Japan.
“Expectations for the third quarter are climbing,” said Eom Giyo, a fund manager at Seoul-based Woori Asset Management Co., which oversees the equivalent to $11.2 billion in assets. “Investors are now looking at whether the company can beat the already heightened expectations.”
Samsung rose 0.7 percent to close at 683,000 won on the Korea Exchange. The shares have gained 14 percent, double the gain in the MSCI Asia Pacifics technology sub-index, from July 6, when the company disclosed second-quarter projections that exceeded analysts estimates. The stocks rally this month has helped mute todays share reaction, Eom said.
Higher Profit
Third-quarter net income will probably increase 76 percent, according to a separate survey of analysts by Bloomberg News. Morgan Stanley and Deutsche Bank AG have raised their share- price estimates for Samsung in the past month, citing the companys improved earnings prospects.
Samsung, South Koreas largest company, is leading a recovery by the nations exporters. Second-quarter gross domestic product rose at the fastest pace in almost six years, the Bank of Korea said today.
As more than $2 trillion in worldwide stimulus helps mend Asias export-oriented economies, Korean companies have been helped by a 20 percent drop in the won against the dollar in the past 12 months, boosting the value of their overseas earnings.
The consumer-electronics division that makes TVs and mobile phones generated 82 percent of Samsungs global operating income and 68 percent of revenue, according to consolidated figures that include overseas affiliates.
TV Boost
Profit from the digital-media business jumped sevenfold to a record 1.06 trillion won, driven by sales of flat-panel TVs, and exceeding estimates at Hyundai Securities Co. and Korea Investment & Securities Co.
The semiconductor division, which posted a loss in the first quarter, turned profitable after chip prices rebounded from record lows. Hynix Semiconductor Inc., second only to Samsung in global computer-memory production, today reported its smallest loss in seven quarters.
Prices of the benchmark computer-memory chip have gained 63 percent this year as industrywide production cuts helped ease a glut that drove chipmakers to record losses last year.
Chip Prices
Average prices of NAND chips, which store songs and pictures in consumer electronics such as MP3 players and digital cameras, have risen 79 percent in 2009, according to Dramexchange Technology Inc., operator of Asias biggest spot market for semiconductors.
Intel Corp., the worlds biggest chipmaker, last week forecast sales and profit margins that topped analyst predictions. Personal-computer makers are boosting orders for chips in anticipation of increasing demand in the second half, Chief Executive Officer Paul Otellini said then.
Profit at the liquid-crystal-display business declined about 85 percent because of lower panel prices. A rebound in LCD prices may become Samsungs next earnings “catalyst” in the third quarter, according to Morgan Stanley.
LG Display Co., the worlds second-largest LCD maker, last week reported profit that beat analysts estimates and forecast prices will rise, fueled by rising demand. Samsung is the biggest LCD maker.