Samsung Q2 Profit Falls

August 1st, 2011 by James

Samsung Q2 Profit FallsSamsung Electronics Co is banking heavily on the booming smartphone market and its mainstay chips business for helping it cope with its underperforming LCD display and TV units.

“Samsung’s earnings momentum will revive in Q3, but the recovery will not be strong because of weak economies in the U.S. and Europe,” said Lee Dong-Jin, fund manager at KTB Asset Management.” There are also no new IT applications that can drive demand as Apple’s iPhone and iPad did.”

From in.news.yahoo.com:

Samsung warned of a challenging business outlook due to uncertain economic prospects. The biggest drain on earnings remains its lossmaking liquid crystal display business.

On Thursday, Sony Corp and Panasonic Corp also warned of weak TV sales, especially in the United States and Europe, following Philips and Corning Inc in highlighting anemic demand.

Samsung’s shares edged up in early Friday trade. The stock has lost 5 percent over the past three months, lagging a 3 percent fall in the KOSPI.

The company boasts a market capitalisation of $134 billion, bigger than the combined value of Sony, Nokia, Toshiba Corp, Panasonic and LG Display.

Samsung, also the world’s No.2 maker of mobile phones, reported a 3.75 trillion won ($3.6 billion) operating profit for April-June, versus the consensus forecast for a 3.7 trillion won profit according to Thomson Reuters I/B/E/S.

“It will be difficult to boost earnings sharply in the third quarter as demand for memory chips and TVs will continue to remain depressed,” said Song Myung-sup, an analyst at HI Investment & Securities. “Its loss-making flat-screen business will also report break even at best.”

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