Seoul, April 18 (Reuters): Samsung Electronics Co reported a worse-than-expected drop of 41 per cent in quarterly profits on Friday because of a slump in memory chip prices. But its shares rose 4 per cent on hopes for an industry rebound.
Weak PC demand caused by the global economic slowdown forced Samsung, the world’s top memory chip maker, to cut contract chip prices almost every two weeks during the first quarter to push products out the door.
“The results are slightly worse than expected,” said Kim Tae-woo, a fund manager at Mirae Asset Management. “But investors are betting memory chip prices will pick up in the second quarter after hitting the bottom in the first quarter.”
Samsung called the outlook “cloudy” amid a sluggish global economy. But it said its chip business may improve in the second half as PC demand picks up and cash-strapped rival memory chip-makers are unlikely to add capacity.
The company, known for sleek colour-screen mobile phones with features such as tiny cameras and voice dialling, said cell phone sales rose 14 percent from the previous quarter.