Samsung SDI Q1 profit falls on TV panel prices
SEOUL, Apr 20: Samsung SDI Co. posted a lower-than-expected quarterly net profit on Thursday, as production problems and sliding screen prices pinched the bottom line of the world's top producer of plasma displays last year.
The outlook for the current quarter remains cautious as the South Korean firm, which sells both plasma screens and traditional cathode-ray tubes (CRT) for TVs, could continue to be plagued by production shortfalls, falling flat screen prices and a sharp decline in sales of CRTs.
Samsung SDI posted a first-quarter net profit of 52.7 billion won (.60 million), lower than the consensus forecast of 76.9 billion won. The figure compared with 82 billion won in the fourth quarter and 54 billion in the first quarter of last year.
The company has been hurt by falling shipments of plasma panels due to production stoppages and line upgrades. It said its sales of PDP screens fell 21 percent from the previous quarter.
The firm was overtaken in plasma displays by Japanese rival Matsushita Electric Industrial Co. in the fourth quarter.
Samsung SDI has said earlier that PDP prices were expected to fall by a fifth this year, after a 25 percent drop last year amid increased production and aggressive discounting.
It was also hurt by shrinking sales of CRT television sets, which accounted for 38 percent of its sales in 2005. The company said first-quarter CRT sales fell 13 percent from the fourth quarter and 15 percent from a year earlier.
Samsung SDI recently announced it would invest 2 million on a new plasma panel production line that would boost its capacity by nearly 70 percent. But the project won't start mass production until May 2007.
Sales came in at 1.72 trillion won, higher than the 1.43 trillion consensus forecast, while operating profit was 41 billion won, roughly in line with a forecast for 47 billion.
Shares of Samsung SDI gained as much as 5 percent at one point on Thursday as its operating profit beat some analyst estimates, with some investors also optimistic for a pickup in demand for TV sales ahead of the World Cup.
Shares of Samsung SDI tumbled 32.2 percent in the first quarter, trailing the South Korean electronics sector's 7.1 percent decline.