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Despite negative factors such as the inquiry into alleged corruption and tax evasion and the credit crunch in the U.S., Samsung Electronics recorded surprise operating profit of W2.15 trillion in the first quarter, up 21 percent from the fourth quarter last year (US1$ = W996). Sales were W17 trillion and net profit W2.19 trillion. This was way above predictions by major domestic securities firms; many estimated operating profit at some W1.7 trillion.
Samsung Electronics said Friday the performance of overseas branches was also satisfactory. With overseas branches combined, the sales figure mounts to W26.1 trillion, and operating profit to W2.57 trillion. The company decided to spend W11 trillion for capital expenditure, including overseas bases; W7 trillion will go into the memory chip field, and W3.7 trillion into the LCD division.
Analysts say the surprise results were made possible by favorable exchange rates and increased market shares in emerging markets such as China, India, and Central and South Asia.
As the won fell against the greenback to about W1,000 to the dollar, operating profit rose by W300 billion. The telecommunication field, including LCD and cell phones, also achieved an impressive record. Satisfactory sales of 46-inch or larger panels and the increased price of LCD all contributed to the success. It was the first time in the firmĄ¯s history that quarterly operating profit broke the W1 trillion mark.
Samsung Electronics also agreed with Sony to invest in an eighth generation LCD line called 8-2 in the Tangjeong factory. After joining hands with Sharp on investing in post-tenth generation LCD lines, Sony had hesitated to make further investment in eighth generation LCD. But the recent excellent performance convinced the Japanese electronics giant.
While intensified competition and diminishing demand in advanced countries played against rivals such as Nokia and Sony-Ericsson, they did not hamper SamsungĄ¯s mobile phone sales. SamsungĄ¯s mobile phone division achieved sales of W5.55 trillion, operating profit of W920 billion, and 16 percent operating margin. This is attributed to the good reception given to premium models like touch-screen phones launched this year.
(englishnews@chosun.com )
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