July 7, 2011 - 14:10 AMT
PanARMENIAN.Net - Samsung Electronics' profitability slumped in the second quarter as strong performance in fast-growing smartphones could not overcome weakness in liquid crystal displays, AP reports.
Operating profit for the three months that ended June 30 will fall to between 3.5 trillion won and 3.9 trillion won ($3.7 billion) from 5.01 trillion won a year earlier, Samsung said in a statement.
Consolidated revenue for the period is expected at between 38 trillion won and 40 trillion won. The company recorded sales of 37.89 trillion won in the same period last year.
Samsung Electronics Co. will release a full earnings report including net profit on July 29 when it will provide reasons for the performance, spokesman Nam Ki-yung said.
Lee Min-hee, an analyst at Dongbu Securities in Seoul, said that the company again suffered from weakness in its display division, which he expects to record a net loss during the quarter on the back of similar red ink in the first three months of the year. "Samsung's smartphone sales were very strong in the second quarter," Lee said, adding that the company sold 19 million of the devices, up sharply from 3.2 million the year before.
Lee said that Samsung's results exceeded his operating profit forecast of 3.4 trillion won amid the strong smartphone sales and cost reductions in the company's semiconductor business that helped offset weak prices for memory chips.
He expects Samsung will record net profit of 3.3 trillion won. That would be down from net profit of 4.28 trillion in the second quarter last year.