À̹ÌÁö È®´ë Samsung Electronics Co. confirmed Thursday that it had posted its second-largest ever quarterly earnings in the first quarter ended March led by a boon in semiconductor business on strong demand for memory chips to power smart devices and broad solid performance in its portfolio mix of high-end electronic appliances and smartphones, and pledged sharp increase in investment to maintain its global lead.
Samsung Electronics released final figures for the first quarter, showing its operating profit in the first quarter at 9.90 trillion won ($8.8 billion), a whopping 48.3 percent gain from the year-ago period and 7.35 percent increase from the previous quarter. It is the second largest-ever quarterly earnings after the historic high of 10.2 trillion won in the third quarter of 2013.
Sales increased 1.54 percent on year to 50.55 trillion won, but decreased 5.22 percent on quarter as it had focused on selling more of lucrative high-end products.
The operating margin that measures the income against sales rose 6.2 percentage points on year to 19.6 percent in the first quarter.
Shares of Samsung Electronics ended Thursday at a new historic high of 2,192,000 won, up 52,000 won or 2.43 percent from the previous session, buoyed by a chain of stock-friendly news including the company¡¯s plan to cancel over $43 billion worth treasury stockholding.
Lee Myung-jin, executive director of Samsung Electronics¡¯ Investor Relations division, said capital investment this year would ¡°significantly increase¡± from last year¡¯s 25.5 trillion won spending.
¡°We have not finalized the (capex) outline, but we are planning big spending in V-NAND flash, system LSI, and OLED segment,¡± he told a conference call.
The world¡¯s top component and set maker of memory chips, smartphones, and OLED panels spent 9.8 trillion won in capital expenditure in the first quarter, of which 5.0 trillion won went into the memory chip line and 4.2 trillion won into display section.
The stellar performance was led mainly by the semiconductor division that recorded 6.31 trillion won in operating profit for the first quarter and replaced historic high of 4.95 trillion won set in the previous quarter. Industry expects the second-quarter profit would become even larger as the price of DRAM and non-volatile storage (NAND) flash memory chips in which the company has an unrivaled leadership continues to strengthen on sizzling demand.
According to market research company Gartner, the outlook for the global semiconductor market is expected to be adjusted upwards due to the rise in DRAM and NAND flash memory chip prices, and this year¡¯s memory chip market is expected to expand 12.3 percent on year to $386.0 billion.
From the display panel business, it raised operating profit of 1.3 trillion won on sales of 7.29 trillion won thanks to increased demand in organic light emitting diode (OLED) displays and strengthening in liquid crystal display panel price.
The mobile phone division saw its smartphone shipment slightly improve but its first-quarter operating profit fell to 2.07 trillion won from 2.50 trillion won in the previous quarter due to the price adjustment of Galaxy S7 and S7 Edge. The company, however, predicted earnings to improve in the following quarter as it begins selling new flagship Galaxy S8 series smartphones that have received raving review and demand since its launch on April 21.
Lee of the IR denied any faults with the phone amid complaints about the red-tinted screens on the new phone, claiming it was a natural result of super OLED displaying colors, adding that it can be fixed by adjusting the color set-up on the device according to user¡¯s preference. The company said it plans to release a software upgrade program that allows users to easily adjust their color settings.
The consumer division delivered 380 billion won in operating profit on sales of 10.34 trillion won. The profit in TV business shrank compared to a year-ago period due to hike in TV panel price and stronger won. Sales from home appliance business improved on year thanks to increased sales in the North American market and high-end products.
By Song Sung-hoon
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