Instant View: Samsung Elec estimates record Q1 profit

SEOUL (BestGrowthStock) – South Korea’s Samsung Electronics Co Ltd, the world’s top maker of memory chips and flat screen TVs, estimated on Tuesday its January-March consolidated operating profit at a record 4.3 trillion won ($3.8 billion).

Following are some reactions from fund managers and analysts:

LEE JEONG, ANALYST, HANA DAETOO SECURITIES

“Results showed Samsung Electronics’ prowess as a top technology firm, and despite concerns about its handset and television units, guidance figures came out strong.

“Looking ahead at second quarter, focus will be on if DRAM sector’s upward momentum keeps up and by how much flat panel prices contract.

“If DRAM market momentum keeps up, I think Samsung Electronics will keep posting operating profits in 4 trillion won level, even near-5 trillion won figures.”

SONG MYUNG-SUP, ANALYST, HI INVESTMENT & SECURITIES

“The second-quarter operating profit can even beat the first quarter’s at around 4.5 trillion won. Mobile phones and TVs will see a seasonal increase in demand while DRAM prices will remain stable. Only LCD and NAND businesses will weaken in the second quarter.”

“I believe earnings would peak in the third quarter, but there’s risk that DRAM prices’ strength may continue and hamper demand growth. DRAM supplies will grow more toward the second half.”

“Among key challenges this year is the foreign exchange rate — not only the won/dollar rate but also falling won/yen rate, as competition with Japan is heating up on flat screen TVs.”

KOO JA-WOO, ANALYST, KYOBO SECURITIES

“Semiconductor sector, where Samsung maintains a solid edge against competitors, seems to have contributed the most while LCD sector’s performance was better than expected on some advance demand before the World Cup soccer events. Read more about increasing you share positions before earning calls.

“Samsung will probably continue to enjoy high profit margins through the third quarter, although there are some uncertainties toward the end of the year because some of the sales we saw in the first quarter were actually advanced.

“The likely appreciation of the won against the dollar will be almost neutral to Samsung’s overall performance because a currencies of those in (South Korea’s) rival countries such as Taiwan will also move up as well.”

MITSUSHIGE AKINO, CHIEF FUND MANAGER, ICHIYOSHI INVESTMENT

MANAGEMENT CO LTD, TOKYO

“Samsung and its rival high-tech companies are being lifted by a global economic recovery and I think that will continue for April-June period. I am hoping to see similarly solid guidance from U.S. and Japanese makers that announce their outlook later. Read more about the market outlook for today.

“Meanwhile, compared with Sony (6758.T: ) and Panasonic (6752.T: ), Samsung has been ahead in establishing profitable operations in emerging markets.”

CHIN SEONG-HAE, ANALYST, SHINHAN INVESTMENT CORP

“The guidance was mostly in line with market consensus. Strong DRAM prices and decreased marketing costs in telecoms and digital media divisions, compared with the fourth quarter, led to record earnings for the first quarter.

“The growth trend will likely continue through the third quarter, led by the semiconductor division and take its full-year earnings to a record too.”

Stock Report

(Reporting by Kim Yeon-hee, Yoo Choonsik, Rhee So-eui in SEOUL, Taiga Uranaka in TOKYO; Editing by Lincoln Feast)

Instant View: Samsung Elec estimates record Q1 profit