Samsung Electronics has announced that net profits climbed to an all-time high of KRW7.15 trillion (US$6.4 billion) in the first quarter of 2013. Consolidated revenues and operating profits for the quarter came to KRW52.87 trillion and KRW8.78 trillion, respectively, in line with company guidance.
"Highlighting the quarterly performance, the IT & mobile communications (IM) division which comprises the mobile communications, networks, and digital imaging businesses achieved profitable results backed by strong smartphone sales coupled with reduced marketing expenses," Samsung said in a statement.
The IM business generated revenues of KRW32.82 trillion in the quarter ended March 31, 2013, up 7% sequentially. Samsung indicated that brisk sales of its Galaxy S3 and Note 2 devices buoyed the unit's profit margin performance in the quarter, but warned of challenges facing the global smartphone market in the second quarter.
"We may experience stiffer competition in the mobile business due to expansion of the mid- to low-end smartphone market," said Robert Yi, senior VP and head of investor relations at Samsung.
Samsung indicated that as more mid- to low-end mobile devices enter the market and new premium products are rolled out, the race for market share will intensify.
As for Samsung's component business, both the semiconductor and display panel divisions suffered revenue decreases sequentially in the first quarter.
Including memory and system LSI, Samsung's semiconductor division posted sales of KRW8.58 trillion in the first quarter of 2013, down 11% sequentially.
Steady demand for mobile DRAM used in smartphones and tablets and a healthier balance of PC DRAM supply and demand, as well as a favorable product mix, will further improve the profitability of Samsung's DRAM business, the firm noted. As for NAND flash, Samsung expects to remain competitive through process migration, which helps it reduce costs and expand offerings of high value-added solution products.
Samsung added its system LSI division was affected by a seasonal slowdown in demand for set products that use logic chips. The firm indicated that the ramp-up of 28nm process technology will make a positive contribution to the unit's profitability later in 2013.
Meanwhile, Samsung disclosed that its display panel segment had a challenging first quarter due to seasonally weak demand from set makers. The division collected revenues of KRW7.11 trillion in the first quarter, down 8% on quarter, with operating profits also declining sequentially to KRW77 billion. The profit figure, however, was higher than the levels reached during the same period of 2012.
Samsung indicated that its display panel division delivered satisfying results in the first quarter thanks to demand for tablets and smartphones. Demand for TV panels is expected to start picking up around the end of the second quarter, said Samsung, adding that the company will focus on enhancing its premium product portfolio such as 60-inch and larger TV panels.
Samsung expects its 2013 capex to be at the same level as 2012, when it allocated KRW22.8 trillion. | 