Samsung raises profit target to $26 bil. this year
By Kim Yoo-chul
Samsung Electronics has revised up its cumulative operating profit target for the year to 30 trillion won ($26 billion).
Analysts and Samsung officials told The Korea Times that the new target looked ``achievable,’’ considering the firm’s bullish moves in smartphones and components such as value-added memory chips and premium flat screens.
``Samsung’s top decision-makers have raised this year’s target to 30 trillion won. One thing that I can confirm is that this year will be better than last in terms of cumulative operating profit,’’ a senior Samsung executive told The Korea Times by telephone, asking not to be named.
Last year, the technology giant generated 16.25 trillion won in operating profit.
This is the first time that it has leaked its annual operating target for 2012. ``That means Samsung’s top executives were impressed by its first quarter performance and believe its dual-strengths ― parts and finished goods ― will bring increased profits,’’ said another company executive contacted by The Korea Times.
Samsung became the world’s biggest cellphone maker in the first quarter, ending Nokia’s 14-year reign in the industry, the goal of the company since it started manufacturing handsets.
Despite the ongoing patent feud with Apple, Samsung’s Galaxy lines are selling well. The company said its next Galaxy smartphone ― the Galaxy S III ― which will be unveiled at a ``Mobile Unpack’’ event on May 3 in London, will be its most ``successful’’ smartphone.
Buoyant smartphone sales also mean Samsung will ship more of its advanced and cost-effective memory chips, which are vital for Web-connected devices such as tablet computers.
As the world’s biggest memory chip supplier, it provides leading companies including Apple, Dell and Hewlett-Packard. It is also the world’s top manufacturer of flat screens.
``Samsung’s business structure is ideally-positioned and its systems are bringing huge synergy. It has strengths in manufacturing and the company is the world’s only sole authorized parts supplier that can guarantee on-time delivery, output commitment and reasonable pricing,’’ said the Samsung executive.
``Our target price for Samsung Electronics shares is 2 million won. Samsung is going to create 30.3 trillion won in operating profit this year,’’ said local brokerage Hanwha Securities in a note to clients.
Ahn Sung-ho, an analyst from the brokerage, stressed the first quarter operating profit for Samsung ― 5.85 trillion won ― was no surprise. ``Samsung’s component business will normalize from the second quarter, while demand for home appliances such as washing machines and air conditioners is expected to jump, helping it report record earnings this year,’’ he said.
Hanwha expects Samsung to reap 7.25 trillion won in operating profit in the second quarter and profit in the third to reach 8.65 trillion won.
Lee Seung-joon, a Samsung Electronics spokesman, declined to comment in any detail but said the company will do better than last year.