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Samsung Electronics’ Q2 earnings fall 26.1%

Source: Samsung Electronics (Yonhap News)
Source: Samsung Electronics (Yonhap News)

Samsung Electronics on Thursday was on par with market forecasts with the announcement that its tentative second quarter operating profit stood at 3.7 trillion won ($3.4 billion), down 26.1 percent from the previous year.

Sales rose 2.93 percent from the second quarter of 2010 to reach 39 trillion won to record a 5.43 percent increase from the first quarter.

The median forecast for Samsung’s second-quarter operating profit was estimated at 3.61 trillion won to record 27.9 percent decline, with sales reaching 40.25 trillion won.

The world’s largest maker of televisions and memory chips had been expected to log lower operating profit on the back of flagging demand for TVs and slumping display prices.

The tentative results showed that Samsung Electronics’ performance would remain sluggish in most sectors except for mobile communication, thanks to its new lineup of smart phones.

But because the earnings were mostly in line with market forecasts, experts said Samsung Electronics stock value would not suffer.

“Samsung stock value will remain in the positive domain for the time being, as the tentative quarterly results surpassed the market forecasts,” said Kang Jung-won, an analyst with Daishin Securities.

He added that corporate value may further rise toward the end of the year, especially if the global electronics maker is able to log a significant increase for the third quarter.

Summer is traditionally considered the down season for the electronics industry.

Semiconductor prices have slackened, while display prices also have not been picking up to add to forecasts that the world’s leading television maker’s display unit will continue to lose money.

Samsung Electronics recently underwent a personnel reshuffle, demoting the head of its liquid crystal display unit while merging the business with others to create a Digital Solutions division.

Experts, however, were skeptical about Samsung Electronics recovering the 1 million won mark this year.

“Unless the semiconductor industry shows concrete signs of recovery, it will be difficult to see the company recover 1 million won,” Kang said.

Samsung Electronics on Thursday closed at 880,000 won, down 18,000 won from the previous day.

By Kim Ji-hyun  (jemmie@heraldcorp.com)
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