While market watchers sounded their disapproval of Nokia Corp.’s handset sales in the first quarter, the Finnish vendor witnessed sound activities in its infrastructure business, including a 16-percent increase in net sales to $1.68 billion, compared with $1.4 billion in the year-ago period.
Meanwhile Samsung Electronics, which likely took handset market share from Nokia, set operating and net profit records as it unveiled its first-quarter results. Samsung, like Intel Corp. and Texas Instruments Inc., basked in strong semiconductor sales-results that look good for wireless business.
“I am pleased with the strong growth in Networks’ sales and the Networks’ operating margin of 12.9 percent, which reflected the positive product mix as well as the full impact of the restructuring measures taken in early 2003,” said Jorma Ollila, chairman and chief executive officer of Nokia.
The company has enjoyed infrastructure profits for two consecutive quarters.
Despite posting strong results, Samsung’s stock was down 3 percent over jitters about a possible slow second quarter. The mobile-phone and semiconductor giant said it savored a net profit of $2.72 billion, representing a 68.7-percent jump from the fourth quarter of 2003, when it posted a net profit of $1.6 billion. Its operating profit also leaped 52.6 percent to $3.4 billion from $2.2 billion in the fourth quarter.
Comparatively, the company’s sales improved sequentially by 11.9 percent to $12.3 billion from $11 billion in the fourth quarter.
Samsung, whose meteoric rise in the handset market has put heat on the competition, enjoyed a 28-percent rise in sales to $3.97 billion from $3.1 billion. Samsung is third in the worldwide handset market share rankings.
In the semiconductor space, Samsung recorded a 5.6-percent rise in sales to $3.5 billion from $3.3 billion in the fourth quarter. Its memory business, which has been one of the company’s strengths, showed a 4.8-percent increase in sales to $2.72 billion against $2.6 billion in the fourth quarter.
Samsung was not alone in the rosy world of semiconductors. In spite of a substantial surge in its first-quarter profits, Intel did not live up to Wall Street expectations, and company shares fell 23 cents to $27.44 Wednesday. However, Intel’s profit rose 89 percent to $1.7 billion in the first quarter of the year in contrast to $915 million in the same period last year. Its earnings per share rose to 26 cents compared with 14 cents in the year-ago period. Wall Street had anticipated 27 cents per share. “Intel’s first-quarter results showed healthy growth in both revenue and earnings compared to a year ago, led by improvement in worldwide IT spending,” said Craig Barrett, Intel CEO. Its sales jumped 20 percent to $8.1 billion compared with $6.75 billion a year ago.
Texas Instruments brought more cheer to the semiconductor industry with a first-quarter report featuring higher profits, revenue and sales in line with Wall Street expectations. The chipmaker reported net income of $367 million, or 21 cents per share, an increase of 214 percent from the year-ago period when it earned $117 million, or 7 cents per share. The company expects its second-quarter profits to more than triple to between 23 cents and 26 cents per share on revenue of $3.09 billion to $3.33 billion.
“TI’s strong wireless growth from the year-ago period continued to outpace the industry’s handset shipments, which we believe reflects the company’s increasing content per phone,” said TI Chairman and CEO Thomas Engibous.
The company’s sales rose 38 percent, indicating that demand for cell-phone chips remained healthy. TI’s performance, in spite of Nokia’s slip in handset market share, reflects its depth and range of customers and products, according to market watchers.
Another chipmaker, Advanced Micro Devices Inc., beat Wall Street expectations in its second-quarter results, a reflection of its robust processor and flash memory businesses. AMD posted a profit of $45.1 million, or 12 cents per share, in contrast to a loss of $146.4 million, or 42 cents per share, in the same period last year. Its revenue leaped 73 percent to $1.24 billion from $714.6 million. “The first quarter of 2004 was a high-water mark for AMD. It was a quarter in which we delivered on a very important promise to ourselves: to make money,” said Hector Ruiz, chairman, president and CEO of the company.
