Samsung posts big profit in 1st quarter
By Kim Yoo-chul
Samsung Electronics said Friday it expects a record operating profit from the first quarter this year bolstered by sales of the Galaxy S II and Galaxy Note.
Also, the bankruptcy of Elpida Memory has helped the Korean tech giant strengthen its bottom line in profits. Chip prices have been showing signs of a rebound after Elpida was delisted from the Tokyo Stock Exchange in February.
In a statement, Samsung estimated its operating profit for the first three months of this year rose to 5.8 trillion won. Its previous record profit was 5.3 trillion won in the fourth quarter of last year.
The company estimated that revenue also jumped by 22 percent to 45 trillion won during the period from 36.99 trillion won a year ago, the company said in regulatory filing.
``I believe those numbers are very impressive. The total operating profit for this year is expected to exceed 20 trillion won from last year’s 16.25 trillion won,’’ a high-ranking executive told The Korea Times by telephone.
Samsung didn’t give a net-profit forecast and performance details of its divisions in its just-announced earnings guidance. The company will announce the breakdown of its first quarter earnings later this month.
Samsung shares inched up by 0.15 percent or 2,000 won to end at 1.332 million won as the profits had already been factored in.
However, analysts expect that the shares will gain more ground, on top of a strong rally over the past few months. Samsung shares have surged by around 30 percent since the beginning of the year, according to data from the Korea Exchange (KRX).
``Shares of Samsung Electronics will rise further. The reason is simple. For foreign and institutional investors, they are the only answer. For them, this is the best,’’ said Oh Sung-jin, the research center head from Hyundai Securities. Some local brokerages expect Samsung shares to rise to 2 million won sometime this year.
The bullish run is powered mainly by a strong performance in the telecommunication division handling smartphones and tablets, officials and analysts said.
Out of the 5.8 trillion won profit estimate, the telecom division is estimated to have contributed over 4 trillion won, analysts said, though Samsung spokesmen remained tight-lipped.
But one clear thing is that Samsung outperformed Apple to become the world’s biggest smartphone maker in the first quarter by shipments.
Samsung sold over 41 million smartphones in the latest quarter, grabbing a 28.2 percent global share. Comparatively the iPhone maker Apple sold some 32 million.
Samsung CEO Choi Gee-sung recently expressed confidence that the global tech powerhouse will emerge as the world’s biggest phone maker including smartphones by the end of the year.
Launched in October last year over 5 million Samsung Galaxy Notes have flown off the shelves.
``Samsung’s chip business, which is also a big cash-generator, is showing signs of a rebound. As the markets are going toward a seasonally-favorable period, Samsung Electronics will write another record in profit in the second quarter,’’ Oh of Hyundai Securities said.
Kiwoom Securities analyst Kim Sung-in echoed the view, saying; ``For the second quarter, Samsung is again likely to see record earnings on strong performances at its memory chip, non-memory chip and smartphone businesses.”