Samsung profit hit by chip weakness it reported friday

Discussion in 'Stocks' started by Cdntrader, Oct 11, 2007.

  1. Samsung profit hit by chip weakness
    Thursday October 11, 8:52 pm ET

    SEOUL (Reuters) - Samsung Electronics (005930.KS), the world's top memory chip maker, said quarterly profits remained flat from last year as sluggish computer memory chip prices offset booming sales of flat screens.

    Samsung Electronics Co Ltd, the most valuable technology company outside the United States, reported on Friday a net profit of 2.19 trillion won ($2.39 billion) in the third quarter ended September, compared with 2.19 trillion a year earlier and 1.42 trillion won in the April-June period.

    The result met the 2.13 trillion won net profit forecast from 10 analysts surveyed by Reuters.

    Although the number represents a strong improvement from the previous quarter, it is much lower than earlier expectations, which banked on a strong recovery at the company's dynamic random access memory (DRAM) chip business.

    The outlook for the rest of the year is clouded by expectations of further declines in prices of DRAM chips, widely used in personal computers, and NAND flash memory chips, used in electronic gadgets like Apple's (NasdaqGS:AAPL - News) iPod and iPhone.

    Analysts do not expect much meaningful improvement in chip prices before the middle of next year.

    Reflecting the weak performance in its bread-and-butter chip division, shares in Samsung, South Korea's biggest stock with a market value of about $89 billion, rose a meagre 1.6 percent in the third quarter, lagging the broader market's (KSE:^KS11 - News) 11.6 percent rise.