UPDATE 1-Samsung SDI Q4 profit below fcast, bullish on 2011

Thu Jan 27, 2011 1:19am EST

Related Topics

* Q4 operating profit 14.7 bln vs 55.6 a yr ago

* Misses 69 bln won f'cast on falling demand, strong won

* 2011 outlook signals room for upside

SEOUL, Jan 27 (Reuters) - Samsung SDI Co Ltd (006400.KS), the world's No.2 maker of rechargeable batteries, reported lower-than expected fourth-quarter operating profit on Thursday, due to a fall in demand for rechargeable batteries, weighed by a stronger won.

"Demand for laptops was a bit stagnant, while tablet PCs gained popularity," said Yoon Hyuk-jin, an analyst at Shinyoung Securities.

Meanwhile, the company said it expected to fare better this year on stronger demand for lithium-ion batteries, projected to grow 12 percent from a year ago.

The world's No.2 maker of rechargeable batteries earned a 14.7 billion won operating profit in the quarter ended December, on sales of 1.2 trillion won.

Analysts polled by Thomson Reuters I/B/E/S had a mean forecast for an operating profit of 69 billion won and sales of 1.3 trillion won.

The South Korean maker of lithium-ion batteries and plasma display panels (PDP) will enjoy improving demand, given a boom in smartphones and tablet PCs, analysts said.

Also, an investment boost in organic display sector by its parent Samsung Group may contribute to the company's profit.

Samsung Group more than tripled its investment in the organic light-emitting diode (OLED) sector to 5.4 trillion won this year from last year. [ID: nTOE704015]

The company runs an equal joint venture with memory chip and LCD giant Samsung Electronics (005930.KS), which produces AM-OLED (active-matrix organic light-emitting diode) screens, a next generation display with more vivid color.

The joint venture called Samsung Mobile Display is the world's largest maker of displays for mobile devices.

With promising OLED business, the burgeoning electric car market may play as a catalyst for Samsung's battery sector for the long term.

In November, its joint venture with Germany's Robert Bosch [ROBG.UL] won a contract to supply lithium-ion batteries for Chrysler's upcoming electric vehicle, the Fiat 500EV, which analysts think boosted prospects for upcoming battery deals with other carmakers.[ID:nTOE6A601R]

(Reporting by Ju-min Park; Editing by Ken Wills)

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