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Samsung Electronics reports record profit
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SEOUL, South Korea (AP) — Samsung Electronics Co., the world's largest consumer electronics firm by revenues, on Friday reported a record-high profit as strong smartphone sales helped mask a drop in semiconductor and TV profit.

Net profit amounted to 5.05 trillion won ($4.46 billion) for the fiscal quarter ending March 31, compared with 2.78 trillion won a year earlier.

Samsung's quarterly operating profit also came in at record high: 5.85 trillion won, in line with the company's guidance provided earlier this month. The operating income doubled from a year earlier.

Sales rose 22 percent from a year earlier to 45.3 trillion won.

Samsung, the world's second-largest handset maker after Nokia Corp., credited its mobile communication business that makes the Galaxy series of smartphones for driving the blowout result.

More than 70 percent of the company's operating income came from its mobile business, which raked in 4.27 trillion won in the first quarter, Samsung said. Samsung narrowly beat Apple in last year's smartphone shipments and analysts estimated its smartphone sales during the January-March period exceeded Apple's iPhone sales by a large margin.

The Suwon, Korea-based company expects its profit to further gain in coming months.

"We cautiously expect our earnings momentum to continue going forward, as competitiveness in our major businesses is enhanced," Robert Yi, head of Samsung's investor relations, said in a statement.

Shares of Samsung opened nearly 2 percent higher after the earnings announcement, touching the all-time high level of 1.37 million won.

Samsung saw significant sales growth of high-end smartphones in developing markets including China, it said. The company last year introduced the Galaxy Note smartphone, featuring a 5.3-inch-long diagonal screen and a stylus pen for taking notes — as well as a new Galaxy S smartphone to compete with Apple Inc.'s iPhone.

Samsung's mobile business president, Shin Jong-kyun, told reporters in February that it eyes 380 million handset sales this year, including 200 million smartphones. The company shipped 330 million handsets in 2011, including 97 million smartphones.

Samsung probably sold 44 million smartphones in the first quarter, according to Matt Evans, a Seoul-based analyst at CLSA Asia-Pacific Markets. Some analysts made a more bullish bet that Samsung's smartphone sales beat 50 million in the period.

The figures far exceed Apple's 35 million iPhone sales in the first three months of this year.

Samsung is scheduled to announce a new Galaxy mobile device next week in London.

Samsung and Apple, the world's two largest smartphone makers with 20 percent and 19 percent of the global market last year, are embroiled in bitter legal battles over mobile patents in four continents that began a year ago.

While they are foes in the lucrative smartphone market, Apple is Samsung's key client in semiconductor and display screen businesses.

Samsung, which is the world's biggest supplier of memory chips, said its operating profit from its semiconductor business in the first quarter reached 760 billion won, less than half from a year earlier.

Computer memory chip prices are sensitive to global economic conditions. Weak consumer demand for personal computers squeezed memory chip prices and forced Tokyo-based Elpida Memory Inc. to file for bankruptcy in February.

Samsung's display panel business made a turnaround from a year earlier to 280 billion won profit as increased sales of lucrative 3-D TV panels and high-resolution tablet PC panels propped up the bottom line.

Market analysts said Samsung benefited from supplying high-resolution screens for Apple's new iPad. Samsung spun off its LCD businesses on April 1 after losing money for several quarters.

The division that makes TVs and home appliances posted 530 billion won in operating profit. Samsung is the world's largest maker of flat-panel TVs, a sector that it competes with LG Electronics Inc. of South Korea and Sony Corp. of Japan.