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Samsung Electronics posts record profits

Smartphones, displays up, chips down for tech giant in first quarter

Samsung Electronics saw its first-quarter earnings hit an all-time high thanks to brisk global sales of smartphones, the company said on Friday.

The Korean tech manufacturing giant said that its operating profit reached a record 5.85 trillion won ($5.15 billion) from January to March, up 98.4 percent from 2.95 trillion won a year earlier.

It posted sales of 45.3 trillion won in the first quarter of 2012, up 22.4 percent from about 37 trillion won a year ago, while its net profit was 5 trillion won, up 81 percent from 2.8 trillion won, according to a regulatory filing.

Its revenue and operating profit slightly outperformed earlier expectations of 45 trillion won and 5.8 trillion won, respectively.

A spokesperson for Samsung Electronics pointed out that its IT and mobile business unit was the main contributor to the company’s first-quarter growth. The unit, which consists of mobile communications, telecommunication systems, IT solutions and digital imaging, saw its revenue of 23.2 trillion won, accounting for more than half of total sales.

The company’s flagship “Galaxy” smartphones, developed by the unit’s mobile communications, helped boost the company’s overall earnings, the spokesperson said.

“Despite difficult business conditions including low seasonal demand for major products such as PCs and TVs amid a global economic slowdown, we achieved record quarterly results based on our differentiated products and technology leadership,” said Robert Yi, senior vice president and head of investor relations in a press statement.

“We cautiously expect our earnings momentum to continue going forward, as competitiveness in our major businesses has been enhanced.”

Meanwhile, Samsung Electronics’ semiconductor business was “bit slow due to seasonal factors,” the spokesperson said, adding that the first-quarter is not usually the best season for chip sales.

Its chip unit’s operating profit dropped 54 percent to 760 billion won year-on-year, according to financial statements.

The spokesperson said that Samsung Electronics aims to bring back its chip business on par with other divisions by focusing on developing “high-efficient DRAM green memory chips” for the global markets.

The company’s display unit made a turnaround, with operating profit of 280 billion won in the first quarter, compared to a loss of 230 billion won a year earlier.

Shares of Samsung Electronics ended up 34,000 won, or 2.54 percent, at 1.374 million won, with its market cap surpassing the 200 trillion won mark.

By Park Hyong-ki (