Samsung Projects Growth

Chip maker, helped by increase price, expects 19% sales rise


Samsung Electronics Co., a global behemoth in memory chips and flat-screen TVs, expects its third quarter sales rise about 19% and sees its consolidated operating profit coming in between 3.9 trillion won and 4.3 trillion South Korean won ($3.67 billion).

Operating profit totaled 1.48 trillion won in the third quarter of 2008.

The company, South Korea's biggest by market capitalization, estimated the consolidated sales of between 35 trillion and 37 trillion won for the third quarter. That compares with sales of 30.3 trillion won a year earlier.

The company is expected to announce its its quarterly earnings profit Oct. 30. All figures are on a consolidated basis.

Samsung didn't provide explanation for the earnings guidance and said the latest forcast may differ from actual earnings because it hasn't completed an audit.

Analysts said the recent sharp rise in the memory chip prices and improved prices for liquid-cystal displays, combined with continued firm performances in Samsung Electronics's other businesses, are buoying the company's third-quarter profits. However, they expect their earnings growth taper off in the current quarter due to strengthening local currency and seasonally higher market costs.

A poll of 13 analysts by local researcher FNGuide put Samsug's third-quarter operating
at 3.7 trillion won. The consolidated sales forcast is 36 trillion won, in line with Samsung's estimates.

" Market share really jumps on all fronts - DRAM, flast, handsets, TVs, LCD panels, " said Jay Kim, who follows Samsung for Hydudai Securities in Seoul.

Despite the news, share of the electronics giant slipped. In Seoul trading, the stock fell 2000 won to 745,000 won, though the still outperform the broader index, which fell 0.5%.

Samsung is the world's largest manufacturer of DRAM, or dynamic ransom access memory, chips, NAND flash memory chips, flatscreen televisions and liquid crystal displays. the company is the world's second-largest maker of mobile phone handsets hehind Nokia Crop.

DRAMs are used mostly in personal computers, while NAND flash chips are used in devices such as digital cameras and music players.

Samsung recorded its first net ever loss in the four quarter of 2008 as the global economic slump hit prices and demand. the company returned to profi in the first quarter of this year, though it was down sharply from the year before.

from WSJ on Oct. 7