Samsung Elec Q2 net disappoints, outlook grim

By Rhee So-eui and Miyoung Kim

SEOUL (Reuters) - Samsung Electronics Co Ltd (005930.KS) posted a lower-than-expected quarterly profit and faces a tough second half with a sluggish memory chip market and lower margins in flat screens and mobile phones.

Shares in the $85 billion South Korean group, the world's top maker of both memory chips and LCDs and its second-biggest handset maker, tumbled more than 4 percent on Friday after the results were released.

"It's unlikely that we will be achieving a sharp recovery (in the third quarter)," said Chu Woosik, executive vice president of investor relations at the technology giant, which is ranked as Asia's third most valuable global brand after Toyota and Honda.

Visibility for the memory chip market was "quite low", he added.

Next year looks equally daunting for the world's top maker of memory chips and liquid crystal display (LCD) screens, with the global economic slowdown set to impact all consumer electronics, from flat-screen TVs to mobile phones and personal computers.

"Recovery in the memory chip sector will not come anytime soon as the macro backdrop remains weak, though it will not get worse from here," said Jay Kim, an analyst at Hyundai Securities.

Samsung's April-June net profit rose 51 percent to 2.14 trillion won ($2.12 billion) from 1.42 trillion won last year during a market slump for dynamic random access memory (DRAM) chips used mainly in personal computers. It earned 2.19 trillion won in January-March.

Analysts had predicted a net profit of 2.30 trillion won.