Samsung’s Q2 profit rises

Fri, 07/24/2009 - 8:10am
Kelly Olsen, AP Business Writer

SEOUL, South Korea (AP) – Samsung Electronics Co., the world's biggest maker of computer memory chips, said second-quarter net profit rose 5.2 percent.

Samsung, also the world's biggest manufacturer of flat-screen televisions, earned 2.25 trillion won ($1.81 billion) in the three months ended June 30, it said in a regulatory filing Friday. The company posted net profit of 2.14 trillion won a year earlier.

Its results were underpinned by growth in sales of flat-screen TVs and mobile phones, as well as better prices for memory chips amid stronger demand for personal computers.

Separately, Hynix Semiconductor Inc., the world's second-largest manufacturer of memory chips after Samsung, said its second-quarter net loss narrowed to 58 billion won from red ink of 711 billion won the year before. The result was its seventh straight net loss. Sales fell 10 percent to 1.68 trillion won.

The results add to signs that the global chip industry is recovering from a lengthy downturn when a supply glut suppressed prices. For Samsung, the profit was its best since the fourth quarter of 2006 and comes after earnings stalled in recent quarters amid the global recession. Net profit fell sharply in the first quarter, and the company reported its first ever quarterly loss in the final three months of last year.

Samsung's sales during the quarter rose 15.9 percent to 21.02 trillion won from 18.14 trillion won a year earlier.

"Samsung achieved outstanding results in the second quarter with our consumer electronics business remaining strong and a solid performance in the still-challenging components market," Samsung vice president Robert Yi said.

The stronger Samsung result came as two other major South Korean companies – LG Electronics Inc. and Hyundai Motor Co. – announced record quarterly profits this week. And in a sign of improvement in South Korea's economy, the Bank of Korea said Friday that gross domestic product expanded 2.3 percent in the second quarter from the first, the biggest gain in 5 1/2 years amid sharp increases in manufacturing and exports.

Samsung, also the world's second-biggest producer of mobile phones after Nokia Corp. of Finland, said that it sold 52.3 million handsets in the second quarter, up 14 percent from the year before, and that prices increased.

Suwon, South Korea-based Samsung said it expects demand for mobile phones to increase in the third quarter and forecast it would exceed its full-year sales target of 200 million phones.

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