Samsung eyes record Q2, to up spending in tech rebound

SEOUL - Samsung Electronics Co Ltd, the world's top maker of memory chips and flat screen TVs, forecast record results as it aims to sharply boost spending, betting on still strong demand in the second half.

Samsung is firing on all cylinders as consumers snap up gadgets and appliances, marking a steep recovery in the once-battered global technology sector, but rising industry investments theaten to restart the chronic oversupply cycle.

Samsung, also the world's No.2 handset maker behind Finland's Nokia, has little traction in the lucrative smartphone markets, which could also be an earnings drag for Asia's most valuable technology firm.

"I expect earnings to peak at Q3 as seasonal demand for memory chips reaches its highest...there is a gloomy air in its telecommunication segment since it has lost ground on smartphones," said Kim Young-june, an analyst at LIG Investment & Securities.

By 0320 GMT, shares in Samsung, valued at around $107 billion, rose 2.1 percent in a strong broader market. The shares have slipped 4 percent after hitting a record high in early April on growing worries of oversupply in LCD and chips.

"We are cautiously optimistic Q2 earnings will improve... As for H2, we are again cautiously optimistic because we expect strong demand for memory chips and LCD to continue, helped by seasonality, as well as continued increase in sales of handsets and TVs," Robert Yi, Samsung's vice president of investor relations, told analysts.

Samsung competes with Sony Corp and LG Electronics in flat-screen TVs and Toshiba and Hynix in semiconductors.

Samsung reported a 4.4 trillion won ($3.95 billion) operating profit in January-March, beating a consensus forecast for a 4.27 trillion won profit by 13 analysts from Thomson Reuters I/B/E/S.