Booming chip demand drives record Samsung net

Samsung Electronics has posted a 3.99 trillion won (€2.70 billion) quarterly profit – its biggest ever – as a result of surging chip sales and the global economic upturn.
 
For the three months to March 31, operating profit rose to KRW4.41 trillion, up from KRW593 billion a year earlier, and sales rose 21% to KRW34.64 trillion, WSJ reported
 
Quarterly earnings were nearly seven times higher than 12 months ago, and more than 30% above fourth quarter results.
 
The chip division contributed 2 trillion won to the operating profit, at a 23.6% margin, compared with a loss in the same period a year ago.
 
The group’s result was also slightly above the average forecast by a Dow Jones poll of analysts, which had forecast a net profit of 3.81 trillion won.
 
The company said profitability would improve in the second quarter across all of its business lines.
 
Samsung’s handset division improved profit to 1.1 trillion won in 1Q, despite a decline in shipments.
 
Operating profit margin at the device group – the world’s second largest handset maker - was 12%, down from 12.7% a year ago. Device shipments of 64 million were down 7% sequentially, but up 40% on 1Q09, resulting in an 8% increase in revenue to 8.6 trillion won.
 
Greg Roh, an analyst at HMC Investment Securities, told the Journal the handset business had performed better-than-expected as the company had cut marketing costs.

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