Hynix Semiconductor Inc., the world's second-largest computer-memory chipmaker, reported its first quarterly profit in two years on higher prices after an industrywide production cut helped ease a glut.
Third-quarter net income was W245.4 billion (US$207 million), compared with a W1.65 trillion (US$1.38 billion) loss a year earlier, Ichon, South Korea-based Hynix said today. That missed the W355 billion (US$298.91 million) mediate estimate of 14 analysts surveyed by Bloomberg News after the company's cost reductions fell short of expectations.
Hynix will probably post its highest profit in three years in the current period, driven by increased prices, according to analysts at Nomura Holdings Inc. and JPMorgan Chase & Co. Hynix's creditors, who own a combined 28 percent stake, last month received a letter of intent from South Korea's Hyosung Corp. for a bid to gain control of the chipmaker.
"Cost cutting was less than expected with higher expenses for testing and depreciation," said Lee Sun Tae, an analyst at Meritz Securities Co. in Seoul, who has a buy rating on Hynix. "Still, the outlook on the industry and Hynix remains positive."
Hynix rose 0.3 percent to 18,850 won at 11:08 am on the Korea Exchange, while the benchmark Kospi index added 0.6 percent. The stock has almost tripled this year on speculation earnings will recover after output cuts eased an industry oversupply and helped chip prices to increase more than three times in 2009.
Sales, Operating Profit
Revenue rose 10 percent to W2.05 trillion (US$1.73 billion) and operating profit, or sales minus the cost of goods sold and administrative expenses, was W165.1 billion (US$139.0 million), versus a loss of W463.4 billion (US$390.18 million) a year earlier. Analysts projected Hynix would post sales of W2.02 trillion (US$1.7 billion) and operating income of W229 billion (US$192.82 million).
Intel Corp., the world's biggest chipmaker, last week forecast sales that topped estimates, and Chief Executive Officer Paul Otellini reiterated that the personal-computer industry may grow this year.
Average prices of Hynix's dynamic random access memory, or DRAM, chips increased about 26 percent in the third quarter compared with the preceding three-month period, the company said. DRAM chips temporarily hold data to help computers run multiple programs simultaneously.
Prices of Hynix's NAND flash memory chips, which store songs and pictures in consumer electronics such as MP3 players and digital cameras, rose 4 percent in the quarter, the company said.