Samsung’s Record Quarterly Operating Profit and Its Strategic Moves

Samsung announced that its 3rd-quarter operating profit (domestic and overseas markets combined) is expected to reach a record high operating profit of 3.5 billion USD, owing to strong performance in its 4 major business sectors (chips, LCD panels, TVs and mobile phones).

From AFP:

“The company, the world's top maker of memory chips and flat TV screens, said in a statement it estimates consolidated operating profit for the third quarter at 4.1 trillion won (3.5 billion dollars).

This would exceed its previous record quarterly operating profit of 4.0 trillion won in the first quarter in 2004. It compares with 1.48 trillion in the third quarter of 2008.

Consolidated sales for the third quarter are estimated at 36 trillion won, up from 30.27 trillion a year earlier, the company said in a statement.”

From AP:

“…Samsung could not comment on reasons behind the expected third-quarter performance.

Analysts cited improving business conditions such as rising prices for memory chips and liquid crystal displays, and weakness in the Korean won against the Japanese yen as positive factors.

"Market share really jumped on all fronts — DRAM, flash, handsets, TVs, LCD panels," said Jay Kim, who follows Samsung for Hyundai Securities in Seoul.

Samsung is the world's largest manufacturer of DRAM, or dynamic random access memory, chips, NAND flash memory chips, flat screen televisions and liquid crystal displays. The company is the world's second-largest maker of mobile phone handsets behind Finland's Nokia Corp...

Samsung recorded its first ever net loss in the fourth quarter of 2008 as the global economic slump hit prices and demand. The company returned to profit in the first quarter of this year, though it was down sharply from the year before.”


Although I would be cautious about Samsung’s outlook due to sluggish spending around globe, there are definitely positive signs. What stands out from this quarterly forecast is that Samsung estimates strong operating profit in system LSI that has been a weak area Samsung has been dying to improve. Samsung is reportedly forging strategic alliance with a small bio startup to develop promising anti-cancer drugs together. Samsung has been greatly interested in health care fields. Samsung is also aggressively launching new projects including solar batteries.