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Asia

Samsung Bucks Trend

1:10 PM -- Samsung Electronics Co. Ltd. (Korea: SEC) surprised the financial markets with better than expected results and a strong showing from its telecom division in the first quarter of 2009.

The telecom unit, which includes wireless handsets and a small WiMax business, posted an operating profit of 0.94 trillion South Korea Won (US$70 million) -- five times more than in the previous quarter, though just 2 percent better than a year ago.

Wireless sales in the quarter totaled KRW6.83 trillion ($510 million). That represented 85 percent of all telecom revenues, while the number of handsets shipped remained at a level similar to the previous year's (though the company did not provide specific unit numbers).

Samsung even managed to increase its average selling price (ASP), with good performances from its touch screen and smartphone ranges, and saw its profit margin rise to 12 percent from 2 percent in the previous quarter.

Growth in the high-end sector is something Samsung believes will continue into the second quarter on the back of strong market demand, but it won't be enough to drive overall market growth.

Indeed, the company's longer-range outlook is in line with that of Nokia Corp. (NYSE: NOK), as both companies expect the overall handset market to contract 10 percent in 2009.

Like-for-like comparisons with the mobile handset market leader, Nokia, aren't easy, but with the Finnish giant posting a 90 percent drop in profits for the quarter, there's little doubt that Samsung has bucked the trend with its mobile terminal sales.

As a result, Samsung expects to have attained its highest ever market share during the first quarter.

Check out more on Samsung's results in this Reuters report.

— Catherine Haslam, Asia Editor, Light Reading

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