Samsung Electronics Co. predicted Thursday an operating profit of up to $3.44 billion for the fourth quarter of 2009 as the world's top TV seller roars back after racking up its first ever loss a year earlier.
The Suwon, South Korea-based corporation expects consolidated operating profit of between 3.5 trillion won and 3.9 trillion won ($3.44 billion) for the three months ended Dec. 31, according to a statement.
Samsung, the world's largest manufacturer of flat screen televisions, computer memory chips and liquid crystal displays, reported a consolidated operating loss of 740 billion won in the same period last year. The loss came amid a breakdown in consumer demand amid the global economic slump.
Samsung provided no reasons for last quarter's performance and planned to elaborate when it officially releases its earnings statement sometime at the end of this month, said spokeswoman Lee Soo-jeong.
Lee Min-hee, an analyst at Dongbu Securities in Seoul, said Samsung has been benefiting from strong performance in flat screen TVs, memory chips and liquid crystal displays.
"Samsung's business has sharply turned around from the second quarter last year," he said as the company has used weakness in the South Korean won — which makes it products more competitive against Japanese rivals — and aggressive marketing to increase market share.
The company, however, faces risks in 2010 in the form of a strengthening won and concerns about how aggressively consumers in the United States and Europe will spend amid lingering high unemployment, he said.
Samsung, which is the world's No. 2 maker of mobile phone handsets behind Finland's Nokia Corp., began issuing earnings estimates for the second quarter of 2009, saying they would help minimize market speculation over its performance and increase corporate transparency.
The estimates include the performance of its overseas and domestic subsidiaries excluding financial business, Lee said.
The company's highest quarterly consolidated operating profit was 4.23 trillion won in the third quarter of 2009, so while the estimated fourth quarter figure would mark a return to profit from the year before it would be weaker than the previous three months.
Samsung estimated consolidated sales of between 38 trillion won and 40 trillion won for the fourth quarter. That compares with sales of 33 trillion won a year earlier.
Samsung's announcement did not include estimates for its earnings on a parent basis, which include net profit. Samsung recorded its first ever quarterly net loss in the fourth quarter of 2008, losing 20 billion won. It also recorded its first quarterly red ink on a parent operating basis.
Dongbu's Lee said that he expects parent net profit to come in at around 3 trillion won, failing to match the third quarter's record 3.72 trillion won performance amid spending for employee bonuses and increased marketing expenses for mobile phones and TVs.
Operating earnings are seen as a direct indicator of core business performance while net profit or loss also reflects taxes, dividends, asset sales and other items.
Shares in Samsung, which released the estimates before the stock market opened, fell 3.3 percent to close at 813,000 won.
Samsung's stock price, which surged 77.2 percent in 2009, hit a record high of 841,000 won Wednesday, according to the Korea Exchange.
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