Samsung: As Much As Proxy For Economy As GE (GE)

GE (GE) earnings are often viewed as a legitimate test of how the global economy is doing. It has tremendous international operations. It has large industrial, infrastructure, medical, financial, and media businesses. But, it is not in most senses a technology company.

In the world of consumer electronics, Samsung may hold a place similar to GE’s.

The Korean company, which is the world’s  premier maker of computer memory chips and flat screen TV and one of the largest suppliers of cellular handsets, earned 619.20 billion won ($463.5 million) in the three months ended March 31, In the same period a year ago, Samsung earned net profit of 2.19 trillion won.

Samsung’s largest business is providing chips for PCs, digital cameras, and portable multimedia devices. If its sales in these business are down, there is no recovery in sight for consumer electronics. Worldwide, buyers of these devices are keeping their wallets closed. That bodes poorly for the retailers that sell these items as well.

The news out of the company was not all dark, and that means that sales of products like TVs and cellphones may not be deteriorating as fast as the did over the last six months . Samsung said it was seeing some recovery in its semiconductor business, a sign that electronics firms have either cleared out their inventories or that there is increasing consumer demand. Either could be the case. If inventories are the primary cause then the spending on consumer tech devices is going nowhere.

Douglas A. McIntyre