Published: Thursday, 23 Jul 2009 | 9:54 PM ET

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Samsung Electronics, the world's top maker of memory chips and LCD screens, reported its best net profit in 10 quarters on Friday as its key chip unit turned profitable again.

Samsung looks poised to make the most of a nascent recovery in the global memory chip sector, as it enjoys a technological advantage made even wider by the two-year-old slump.

"Samsung Electronics will benefit the most from the current chip sector recovery as it is the market leader in the most advanced mass produced DDR3 chips," said Kim Sung-in, IT team head at Kiwoom Securities. 

"One of our worries is that its handset unit may not do as well as the markets' hyped-up expectations. Memory chips and flat panels will be the biggest supporter of Samsung Electronics' second half earnings," Kim said. 

Samsung itself sounded a cautious note about the rest of the year.     

"We maintain a cautious view looking ahead to the remainder of 2009, as operating profit may be affected by a possible appreciation of the Korean won and intensifying market competition," Robert Yi, head of Samsung's investor relations team, said in a statement.

Samsung's semiconductor business posted a consolidated operating profit margin of 4 percent, a strong turnaround from its 13 percent loss margin in the previous quarter.

In mobile phones, where Samsung ranks behind only Nokia, the profit margin of its telecom division edged down to 10 percent in the second quarter from 11 percent in January-March.

April-June net profit rose 5 percent to 2.25 trillion won ($1.81 billion) from 2.14 trillion won a year ago, beating an average forecast for 1.68 trillion won in a Reuters poll of 11 analysts.

Samsung reported an April-June operating profit of 1.06 billion won, in line with a forecast for a 1.19 trillion won profit.

The figure was well below last year's 2.15 trillion won profit but a seven-fold improvement from the first quarter's 148 billion won profit.

First-quarter sales were 21 trillion won, up from 18 trillion in the year-ago period.

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Samsung's shares rose 0.3 percent in early trade, compared with a 0.5 percent rise in the Kospi, as the results were roughly in line with previous guidance.

Samsung on July 6 released better-than-expected guidance on its consolidated operating profit, raising hopes the company's parent-basis results would also beat expectations.

Shares in South Korea's biggest company have risen 50 percent this year through Thursday, beating the broader market's 33 percent gain.

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