Samsung Electronics’ quarterly net profit fell to record low amid the price decline for its computer memory chip.
Despite an overwhelming improvement in its flat screens sales, the company recorded 5 percent dip in second quarter’s net profit, which is lowest in the last four year.
In this quarter, Samsung earned a meager net profit of $1.55 billion, but it’s better than the expected results. Company’s operating profit slipped to 911 billion won, against 1.42 trillion won a year ago. Samsung’s sales surge minutely to 14.63 trillion won ($18.2 billion) from 14.1 trillion won a year earlier.
In its mobile phone market, company sold record 37.4 million phones, but felling prices mar its profit margins as it fell to 8 percent from 13 percent. Samsung is also world’s biggest maker of large liquid crystal displays (LCD), which posted an operating profit margin of 9 percent in its display division. But it could not defend company’s sluggish profit.
Despite a sluggish quarter and tough market competition, Samsung is hopeful that the coming time will be brighter for dynamic random access memory (DRAM) chips, used in personal computers, expected to recover on seasonal demand, along with strong sales of mobile phones and flat screens.
Lee Min-hee, an analyst at Dongbu Securities said:
Third quarter results should be better across the board, with LCD division growing further and handset margins improving and especially DRAM results in the third quarter will obviously be better than in the second
With this profit expectation, company’s shares increased 6.4 percent to $749, but rumor of hostile takeover plan from U.S. investor Carl Icahn has further strengthened its position in the market.
Via: Washington Post
