Samsung profit climbs to record on strong memory-chip demand
Samsung Electronics Co. reported a 58% surge in profit, topping projections as demand for its memory chips remained strong enough to outweigh concerns about display supplies to Apple Inc.
Operating income rose to 15.6 trillion won ($14.7 billion) in the three months ended March, according to preliminary results released Friday from the Suwon, South Korea-based company. That compares with the 14.5 trillion-won average of analysts’ estimates compiled by Bloomberg. Sales for the first quarter climbed to 60 trillion won, compared with the 61.3 trillion won average projection compiled by Bloomberg.
The first-quarter result, which includes the sales of its marquee Galaxy S9 smartphone unveiled in February, may ease concerns about its display business after Apple sold fewer-than-projected iPhone X handsets with Samsung-made displays. Still, resilient demand for memory chips used in phones and servers could keep the electronics maker on track to post another year of record profit, after replacing Intel Corp. last year as the world’s biggest chipmaker by sales.
“Memory chips are the loyal son of Samsung,” said Lee Jaeyun, an analyst at Yuanta Securities Co. “Still, momentum may slow toward the end of this year with price rises likely to be less steep than last year.”
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The shares of Samsung fell about 1% in Seoul, as the KOSPI index declined on concern over US tariffs. The stock is down more than 5% this year, after climbing 41% in 2017. Samsung is reporting its first results since de facto chief Jay Y. Lee was released from prison on a suspended sentence for a bribery conviction in February. The 49-year-old vice chairman has since traveled to Europe to meet with business partners and been spotted in Canada. His father, chairman Lee Kun-hee, remains hospitalized after a 2014 heart attack.
The semiconductor business forms the largest portion of Samsung’s profit. Prices for 128 gigabit MLC NAND flash memory chips fell 10.7% in the March quarter from the December period while contract prices for 32 gigabyte DRAM server modules climbed 5.6% in the same period, according to inSpectrum Tech Inc.
South Korea’s LG Electronics Inc said it expects first-quarter operating profit to rise 20 percent from a year ago to its highest in 9 years, beating market expectations. The world’s No.2 television maker did not disclose details of the results but analysts said bullish sales of OLED TVs and premium home appliances likely offset weakness in its mobile phone division. Preliminary January-March profit came in at 1.1 trillion won ($1 billion), the company said.
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Apax Partners Llp has acquired Bengaluru-based medical devices company Healthium MedTech Pvt. Ltd (formerly known as Sutures India).
The London-based private equity (PE) fund has acquired close to 100% stake from existing shareholders, including TPG Growth, CX Partners, and founding shareholders.
Though the size of the deal was not disclosed, the transaction is in range of $350 million, said a person aware of the development. TPG Growth owns around 73% in Healthium, while private equity fund CX Partners holds 12%. The rest is held by the promoters.
Mint reported in November that several PE funds, including Bain Capital Lp, Advent International Corp. and Carlyle Group are in a race to acquire surgical equipment maker Sutures India in a deal worth about $425 million.
Healthium, which makes surgical and wound-closure products such as natural and synthetic, absorbable and non-absorbable sutures, surgical needles, staples, tapes and bone wax, competes with firms such as Smith and Nephew Plc, Ethicon Inc. and ConvaTec. TPG Growth invested in Sutures in 2013 by acquiring a 23% stake from CX Partners and the firm’s promoters for ₹145 crore. Over time, TPG raised its stake and now holds a majority in Sutures.
LG ELECTRONICS POSTS HIGHEST Q1 PROFIT SINCE 2009 SEOUL: MUMBAI: