Samsung Electronics posts operating profit of $4.3 bln

15:50, October 07, 2010      

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Samsung Electronics, global memory chip tycoon, on Thursday announced its preliminary earnings guidance for the third quarter of 2010, posting a lower-than- expected operating profit.

The company said in its regulatory filing that its operating profit is estimated to be 4.8 trillion won (4.3 billion U.S. dollars) for the period, up 13.7 percent from a year ago.

The Q3 figure, however, declined from the previous quarter when it stood at 5.0 trillion won (4.5 billion U.S. dollars).

Meanwhile, consolidated sales for the cited period marked 40 trillion won (36 billion U.S. dollars), up 11.5 percent from a year ago and 5.6 percent from the previous month, said the company.

Samsung's earnings announcement stood lower than market expectation, with local analysts' consensus on sales and operating profit having been set at 41.5 trillion won (37.2 billion U.S. dollars) and 5.1 trillion won (4.6 billion U.S. dollars), local daily Hankyung said.

The decline in operating profit, however, was forecasted by Samsung upon the announcement of the Q2 earnings, which pointed to higher competition in TV and mobile phone businesses as possible barriers to its strong profits.

"With competition in the digital media and mobile industries intensifying, it may become a challenge to maintain current profitability levels," Robert Yi, head of the company's investor relations team, said in July.

Samsung Electronics expects further earnings decline, predicting its profit will likely hit the bottom in the fourth quarter due to a drop in memory chip prices and sluggish PC sales.

Following the report, shares of Samsung Electronics ended 2.9 percent lower from the previous session, selling at 770,000 won ( 691 U.S. dollars).



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