AfterDawn: Tech news

Weak demand for TVs, computers hits Samsung

Written by James Delahunty (Google+) @ 07 Oct 2010 20:33

Weak demand for TVs, computers hits Samsung Shares of Samsung Electronics took a hit as South Korean consumer electronics giant estimated its July-September operating profit and sales to come below market consensus. The world's biggest maker of LCDs expects to see an end to its run of record breaking quarters as a stumbling world economy hits demand for computers and televisions.
"LCD and TV performance appears to be worse than expected and the downward pressure on earnings will only grow as chip prices are also falling and TV makers increase price cuts," said Chung Young-woo, an analyst at Korea Investment & Securities.

"Usual uptick in seasonal year-end demand will be smaller this time and an earnings recovery is unlikely until early next year."

Samsung has kept its No. 1 slot in television sales, ahead of Sony and Panasonic, and has also performed strongly over chip rival Micron. It is the most valuable technology firm in Asia, worth approximately $116 billion. Shares in Samsung after the dull news spread around closed 2.9 percent lower.

"Earnings will slide further but the stock is looking attractive as the slowdown is already priced in and Samsung will benefit most from any demand recovery, being the No.1 in many areas," said Jung Sang-jin, a fund manager at Dongbu Asset Management.

Samsung is taking direct aim at Apple Inc. with its Galaxy Tablet which analysts feel is the strongest rival to the iPad. It has also sold 5 million units of its Galaxy S high-end smartphone since June, powered by Google's Android software.

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