Profits fall at Samsung as TV sales drag

 
City A.M. Reporter
PROFIT at Samsung Electronics, the world’s largest maker of memory chips and televisions, fell by a quarter as weak earnings at its flat screen unit dragged, underlying the conglomerate’s struggle to return to last year’s record profit.

A bleak outlook for computers and TVs and a wobbly global economy is overshadowing robust sales of Samsung’s new version of its flagship Galaxy S smartphone, which has emerged as a major competitor to Apple blockbuster iPhone.

Samsung, one of the first major global technology firms to kick off quarterly earnings, is expected to have become the world’s top smartphone vendor in the second quarter, ending Nokia’s more than 10-year reign.

“The forecast is slightly better than what the market had been expecting as many had been slashing their forecasts recently due to losses from the LCD division,” said Kim Young-chan, an analyst at Shinhan Investment Corp.

Samsung’s shares closed two per cent lower, underperforming a 0.4 per cent rise in the market. The shares, which have one hold recommendation and no sell ratings among 46 analysts tracking the company, have risen nearly nine per cent so far this month, beating a three per cent rise in the broader market.

“Optimism for the second half is somewhat reflected in its recent share move and now investors are bit concerned about falling chip prices,” said Kim Sung-in, an analyst at Kiwoom Securities.

Samsung boasts a market capitalisation of $134bn (£84bn), bigger than the combined value of Sony Corp, Nokia, Toshiba Corp, Panasonic Corp and LG Display.

Samsung overtook Sony as the world’s most popular consumer electronics brand in 2005.