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Samsung second quarter profit slides 18 percent

Samsung second quarter profit slides 18 percent

By Associated Press | Updated: 5 June 2012 01:56 IST

Highlights

Samsung's net profit slid 18% in 2Q as weakness in semiconductors and LCD's countered the growing strength in smartphones.

Samsung's net profit slid 18 percent in the second quarter as weakness in semiconductors and liquid crystal displays countered the electronics giant's growing strength in smartphones.

Samsung, the world's biggest manufacturer of memory chips, LCDs and flat screen televisions, earned 3.51 trillion won ($3.33 billion) in the three months ended June 30, it said Friday in a regulatory filing. Samsung earned 4.28 trillion won the same period last year.

Samsung has suffered this year due to slack prices for electronic components amid oversupply and weak demand. Net profit slumped 30 percent in the first quarter amid declines in memory chip prices and reduced profitability in LCDs and TVs.

Second quarter sales at the Suwon, South Korea-based company rose 4.1 percent to 39.4 trillion won from 37.9 trillion won a year earlier.

Both operating profit and sales in Samsung's memory business fell as weak global personal computer sales suppressed demand for DRAM, or dynamic random access memory, chips used in the devices, the company said in a release.

Samsung's display panel business racked up an operating loss of 210 billion won as revenue dropped 9 percent from the year before as LCD prices fell.

The bright spot continued to be mobile phones. Revenues in the company's mobile communications business, which includes phones, rose 45 percent from the year before. Sales of mobile phones increased from the previous quarter on the back of the company's flagship Galaxy S II smartphone.

Samsung, which ranks No. 2 in mobile phones behind Finland's Nokia Corp., has sold more than 5 million units globally of the updated smartphone since it went on sale in late April.

The company said it expects demand for mobile phones to increase 15 percent in the second half of this year "driven by consumers upgrading to smartphones."

Shares in Samsung, which announced results before South Korea's stock market opened, rose 1.1 percent to 846,000 won at about midday Friday.

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