* Estimates Q1 op profit at 5.8 trln won vs 5.0 trln fcast
* Estimates Q1 sales at 45 trln won
* Q1 smartphone sales estimated at 44 mln units - analysts
* Shares up 25 pct so far this year
By Miyoung Kim
April 6 Samsung Electronics, the
world's top technology firm by revenue, posted record quarterly
profits of $5.15 billion on booming sales of its Galaxy
smartphones and the Note, a mini-tablet and phone.
Samsung, which raced to the top of the global smartphone
rankings last year with close to a fifth of the market, from
just 3 percent in 2009, should consolidate its position against
Apple Inc and others with more product launches,
including a revamped Galaxy S, over the next few months.
January-March operating profit was 5.8 trillion won, almost
double the year-ago level and better than a consensus forecast
of 5 trillion won from analysts surveyed by Thomson Reuters
I/B/E/S. It also topped the preceding quarter's previous record
of 5.3 trillion won.
Revenue was 45 trillion won.
Samsung, Asia's most valuable technology firm worth some
$191 billion, released its January-March estimates on Friday
ahead of detailed quarterly results due on April 27.
"There was a big surprise in profit, while revenue was in
line, which suggests a stronger than expected profit margin from
the handset division thanks to robust sales of high-end models
like the Galaxy S and Note," said Choi Do-yeon, analyst at LIG
Investment & Securities.
"Handset margins are estimated to have topped 20 percent and
profits from the division also topped 4 trillion won. This is
really a blowout result and there could be more surprises in the
coming quarters as other businesses such as chips show
Samsung is expected to have shipped a record 44 million
smartphones in the first quarter just ended, up by almost 25
percent from October-December levels, according to a Reuters
survey of analysts.
Samsung introduced the Galaxy Note, a mini-tablet and phone
with a screen half the size of the iPad, in late October, and
the top-end model has quickly become its core profit earner.
Sales of the Note, which has revived the throwback stylus
function, have topped 5 million, increasing the pressure on
gadget strugglers HTC, Nokia and Research
"Sales of the Note were very good and it's become Samsung's
fresh money generator," said Lee Seung-woo, an analyst at
Shinyoung Securities, speaking ahead of Friday's estimates.
The handset division is likely to account for around two
thirds of Samsung's total profits, analysts forecast.
While Apple is Samsung's biggest rival in smartphones, the
U.S. company is also its biggest client, gobbling up Samsung's
high-end displays and microchips for its iPhone and iPad.
"Samsung's integrated business model - for instance, it
makes its own application processors and AMOLED screens - is the
biggest ingredient of its winning formula, which, in our view,
can't be easily copied," Daniel Kim, an analyst at Macquarie,
wrote in a research note.
Song Myung-sup, an analyst at HI Investment & Securities,
forecast Samsung's smartphone market share gains would
accelerate with the release, probably in June, of the next
version of the Galaxy S. "Its smartphone growth momentum will
continue at least until the end of the third quarter," he said.
Earnings prospects for memory chips, where Samsung is also a
world leader, have also brightened since Japan's Elpida Memory
filed for bankruptcy, prompting its customers to switch to
rivals such as Samsung and SK hynix to secure
supplies of the chips used in smartphones and laptops.
"Contract chip prices are likely to continue to rise in the
second quarter, possibly another 10-15 percent, as big customers
like Apple, Dell and HP may seek to increase
supply in the wake of Elpida's trouble," said Choi Sung-jae, an
analyst at SK Securities.
Samsung shares have risen by a quarter so far this year, and
hit a life high of 1.351 million won ($1,200) on Wednesday. Over
the same period shares in Apple have soared by more than half,
taking the California-based firm's value to above $582 billion -
more than three times that of Samsung.