Samsung profit jumps as Toshiba’s plunges on HD DVD losses - Emirates24|7

Samsung profit jumps as Toshiba’s plunges on HD DVD losses

(AP)

 

Samsung Electronics said on Friday that net profit jumped 37 per cent in the first quarter as strength in mobile phones and liquid crystal displays offset weakness in semiconductors.

Samsung earned 2.19 trillion won ($2.2 billion; Dh8.10 billion) in the three months through March, compared with 1.6 trillion won in the same period last year, according to a statement. Sales rose 19 per cent to 17.11 trillion won ($17.19 billion; Dh63.26 billion).

Other Asian technology companies did not fare as well.

Japan’s Toshiba Corp said its net profit plummeted a staggering 95 per cent due to losses related to its exit from next-generation video HD DVD business.

South KoreaÕs Hynix Semiconductor Inc., meanwhile, said it swung to a net loss in the first quarter on a sharp fall in memory chip prices amid oversupply in the industry.

Samsung, the world’s second-largest producer of mobile phones after Nokia Corp, said it sold 46.3 million handsets in the quarter, 33 per cent more than the year before.

“Strong growth in emerging markets was balanced by the more difficult economic situation in both North America and Europe,” said David Steel, vice president of Samsung’s telecommunications business.

Steel said handset sales equaled SamsungÕs record total in the fourth quarter, despite a 13 per cent contraction in the global handset market in the traditionally slow first three months of the year.

Investors cheered the news, pushing Samsung shares up 4.4 per cent to close at 690,000 won ($694; Dh2,554).

Samsung also said that sales of liquid crystal displays rose 53 per cent on year, though semiconductor revenues declined 2 per cent amid traditionally slow seasonal demand and continued weak pricing.

The company is the world’s largest producer of both products.

Hynix Semiconductor, the world’s second-largest manufacturer of memory chips after Samsung, posted a net loss of 674.79 billion won ($678.43 million; Dh2.50 billion). It recorded net profit of 418.11 billion won during the first quarter last year.

Sales fell 35 per cent to 1.573 trillion won ($1.58 billion; Dh5.81 billion).

Hynix shares fell 1.4 per cent to 28,100 won ($28; Dh103.04).

In Japan, Toshiba said its profit stood at 1.25 billion yen ($12 million, Dh44.16 million), down from 26.17 billion yen a year earlier. Quarterly revenue fell 3 per cent from a year earlier to 2.09 trillion yen ($20 billion, Dh73.6 billion).

“Our net profit sharply fell due to the end of HD DVD business,” Toshiba spokeswoman Hiroko Mochida said, adding that pulling the plug on its HD DVD business cost about 48 billion yen ($461 million; Dh1.7 billion).

Most of the losses come from shutting down assembly lines and dealing with inventory, according to Toshiba.

Toshiba announced the end of its HD DVD business in February. The technology had been competing against Blu-ray disc technology, backed by Sony Corp, Matsushita Electric Industrial Co, which makes Panasonic brand products, five major Hollywood movie studios and others.

For the financial year through March, Toshiba’s net profit declined 7 per cent to 127.4 billion yen ($1.2 billion, Dh4.42 billion).

Sharp Corp, meanwhile, said net profit edged up 0.2 per cent in the fiscal year ended March 31, as solid demand for its liquid crystal display panels offset sliding prices for other products.

Osaka-based Sharp, known for its Aquos LCD TVs, said net profit for fiscal 2007 was 101.9 billion yen ($977.6 million; Dh3.6 billion), up a fraction from 101.7 billion yen a year ago.

The company didn’t disclose details of fourth-quarter results.

Sharp shares ended the day up 1.1 per cent at 1,797 yen ($17; Dh62.56), while Toshiba’s stock fell 2 per cent 848 yen ($8.15; Dh30).

Separately, Samsung and Japan’s Sony Corp announced they have signed a contract to expand production of LCDs at their joint-venture manufacturing facility in South Korea to meet global demand for televisions.

Production is targeted to begin in the second quarter of 2009, the companies said in a statement released by Samsung. (AP)

 

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