Seoul: South Korea’s Samsung SDI Co. Ltd on Tuesday reported a forecast-beating spike in quarterly operating profit, with a boom in smartphones and other mobile gadgets sparking demand for rechargeable batteries.
Demand for lithium-ion batteries and plasma display panels (PDP) is expected to pick up through the third quarter as improving economies boost spending on smartphones and portable computers such as Apple’s iPad tablet PCs.
The maker of lithium-ion batteries and PDP posted a 64.6 billion won ($58.5 million) consolidated operating profit in the first quarter, a 72% surge from a revised 37.5 billion won operating profit a year ago.
The results beat a consensus forecast of 55 billion won from 22 analysts surveyed by Thomson Reuters I/B/E/S, and compared with a revised 55.6 billion won profit three months earlier.
SDI said in a statement that the lithium-ion battery market would expand by about 10% in the current quarter, led by notebook PCs, including tablet PCs, and expanding smartphone lineups.
Apple’s iPhone and iPad should aid Samsung SDI’s outlook and if Apple adopts AM-OLED (active-matrix organic light-emitting diode) for its flagship products, SDI would gain a further boost, analysts say.
Samsung SDI sells AM-OLED displays and rechargeable batteries used in smartphones from Nokia, Samsung Electronics and Apple.
The company also expects PDP display demand to grow 6% in the April-June period from three months before, with the portion of big screens seen up as demand from 3D TV makers is on the rise.
PDP makers are pinning high hopes on the emerging 3D TV market, which usually uses large screens where PDP scores on pricing and boasts wider viewing angles and quicker response times than liquid crystal display (LCD) panels.
However analysts warn increasing supply of lithium-ion batteries would lead to price cuts and lower battery margins, posing a near-term risk to the company.
Sales at SDI increased to 1.2 trillion won from 1.0 trillion won a year ago, but decreased from 1.4 trillion won in the last quarter of 2009 due to a seasonal slowdown in electronics products.