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Samsung earnings drop but beat expectations

25 April 2009 21:23 by James "Dela" Delahunty

South Korean consumer electronics giant Samsung Electronics has reported a sharp drop in net profit, but still beat analysts expectations. Net profit fell by 72 percent year-on-year to 620 billion Korean won over the first quarter while its revenue grew 9 percent to 18.97 trillion won. The company's mobile phone handset division led the earnings, driven by continued demand in developing nations.

"It's very difficult to gauge the demand outlook," said Robert Yi, vice president of investor relations at Samsung, remaining cautious in global economic uncertainty. The company reported stabilizing LCD panel and memory chip prices, and better profit margins for mobile handsets. However, Kim Hyungdo, a vice president in Samsung's telecommunications division warned that demand for mobile handsets in emerging market is declining.

"We will monitor whether LCD panel prices continue to rise despite sluggish economic conditions," said Cho Yeongduk, a vice president in Samsung's LCD Business. LCD panel prices increased lately, as have prices for memory chips such as DRAM and NAND flash memory. Cho Namseong, a senior vice president in Samsung's semiconductor business, however, warned that price increases will lead to production increases, which inevitably sends prices down again.

Permalink to this article | Topic: Phones