Samsung Electronics Records Operating Profit of 1.16 Trillion won

Samsung Electronics, the world`s largest computer memory chipmaker, reported Wednesday that its second-quarter sales gained 2.5 percent to 9.84 trillion won from the previous quarter, with net profit up 0.2 percent to 1.13 trillion won.

Operating profit, however, fell 14 percent to 1.16 trillion won from the first quarter. The figure has exceeded 1 trillion won for the past six consecutive quarters, but has edged downward trend for the most recent five quarters.

“Due to SARS and the economic downturn all over the world, the results fell short of our expectations,” said Cha Young-soo, a senior official of Samsung Electronics. “Given the difficult business climate, however, we met market expectations by outperforming Intel, Nokia, Motorola, Philips, and Sony,” he added.

As investors saw the results in a positive light, Samsung`s stock price closed at 416,500 won, up 2.45 percent from the previous day.

During the second quarter, the company`s thin film transistor-liquid crystal display (TFT-LCD) business was a star performer, while its mobile phone handset business was sluggish. Sales of LCD products increased 42 percent to 1.9 trillion won from a quarter earlier, breaking the 1-trillion-won mark for the first time. Meanwhile, sales of handsets plunged to 2.79 trillion, down 8.2 percent from the previous 3.4 trillion won.

Despite falling prices, sales of memory chips rose 1.8 percent to 1.83 trillion won from the first quarter amid increased sales of flash memory and rising demand for DDR400 memory chips. Operating profits of digital media and home appliances declined 60 percent and 70 percent, respectively, from the previous quarter.

By business line, semiconductor division sales reached 3.76 trillion won, telecommunications 3.18 trillion won, and digital media 1.85 trillion won. Operating profits by division were 570 billion won for semiconductor, 550 billion won for telecommunications, 40 billion won for digital media, and 3 billion won for home appliances.

“We expect an improvement in the second half of this year, owing to increased sales and profits from June onward,” said Cha.

Tae-Han Kim freewill@donga.com