Samsung - Q2 2005 resultaten vooruitzicht - betere vooruitzichten voor H2 2005 ?

Samsung Elec Q2 profit to halve as chip prices sink
Mon Jul 11, 2005 10:51 PM ET By Kim Miyoung
SEOUL, July 12 (Reuters) - Samsung Electronics Co. Ltd. (005930.KS: Quote, Profile, Research) is set to report on Friday its second-quarter profit halved on tumbling prices of memory chips and lower margins on flat screens as well as mobile phones.
But analysts say the outlook for the South Korean firm, the world's most valuable technology firm outside the United States, will improve in the second half from the first, helped by better flat screen and memory chip prices.
"Samsung's earnings will show a modest recovery in the second half on the back of a recovery in its memory business and gradual improvement in both handset and LCD (liquid crystal display) operations," said Chin Yeong-hoon, a Daishin Securities analyst.
Expectations for a second-half recovery has sent shares in Samsung Electronics, which has a market value of $79 billion, up 9 percent since July, more than double the rise in the main index .
Samsung, the world's top manufacturer of memory chips, and other global chip makers have raised output, pushing average contract prices of DRAM (dynamic random access memory) chips down 34 percent in the last quarter.
"A sustained fall in prices of flash memory chips, Samsung's core earnings driver, will put pressure on the bottom line", Chin added, referring to flash chips used in hot-selling music players, digital cameras and mobile phones.
Samsung's chief executive said in June that prices would stabilise as DRAM makers shift capacity to flash chips and a migration to next generation chip technology remains slow.
Samsung, also the world's third-largest mobile phone maker, is expected to report 1.59 trillion won net profit for the second quarter to June, according to nine analysts surveyed by Reuters.
That would be down 49 percent from 3.13 trillion won a year ago, but up 6 percent from 1.5 trillion in the first quarter as a fall in liquid crystal display (LCD) prices starts easing.
Sales are estimated at 13.8 trillion won, versus 14.98 trillion year ago and unchanged from the first quarter.
Samsung is expected to report a 7.6 trillion won profit this year, down 30 percent from a record 10.8 trillion a year ago, according to Reuters Estimates. The forecast indicates second-half profit would be unchanged at 4.5 trillion won from a year ago.
MILD RECOVERY
LCD prices have crumbled at a double-digit rate since late last year as demand for expensive flat-screen televisions failed to meet the expectations of manufacturers, who are spending more than $51 billion to drive up production over the next decade.
But prices of some LCD panels have already shown signs of stabilising, with those of 17-inch monitors rebounding 4.5 percent in the second quarter, analysts said.
"We expect Samsung's LCD earnings to improve in the second half due to increased demand on the back of low retail prices for LCD monitors and TVs," said Jae H. Lee at Daiwa Institute of Research.
LG.Philips LCD Co. Ltd. (034220.KS: Quote, Profile, Research) (LPL.N: Quote, Profile, Research) , the world's number-two flat screen maker, posted a 94 percent slump in quarterly profit on Monday, but earnings beat forecasts and the firm predicted a recovery in panel prices in the second half.
In mobile phones, Samsung has said shipments in the second quarter would be similar to the first quarter's 24.5 million but margins would edge down on increased marketing costs.
Analysts see Samsung's mobile phone profit margin at 14 percent, versus 17 percent in the first quarter, as a price war led by market leader Nokia (NOK1V.HE: Quote, Profile, Research) forces Samsung to sacrifice profits by spending more to lure customers.
"We expect the battle for market share among handset manufacturers to become more intense, and forecast Samsung's operating profit margin will remain at a mid-teen percent throughout the second half," Daiwa's Lee said.
Samsung's global handset market share rose to 13.3 percent in the first quarter from 12.2 percent in the fourth quarter, while Nokia's share dropped to 30.4 percent and the second-ranked Motorola Inc. (MOT.N: Quote, Profile, Research) rose to 16.8 percent.
JP Morgan said Samsung's unit sales of DRAM chips are likely to have grown 7 percent in the second quarter from the previous quarter, while its average selling price fell 20 percent.
Unit sales of flash memory chips are expected to have increased 8 percent, with prices falling 10 percent, as rivals such as Hynix Semiconductor Inc. (000660.KS: Quote, Profile, Research) ramp up production and demand growth from digital camera makers slows.
Samsung shares edged down 1.6 percent in the second quarter and lagged a 4.4 percent rise in the broader market, mainly hit by sharp fall in chip prices.