Seoul :  Samsung Electronics, Asia's biggest maker of semiconductors, flat screens and mobile phones, reported profit that missed analysts' estimates, fuelling concern the global recovery in demand for electronics is stalling.

Third-quarter operating income rose 14 per cent to 4.8 trillion won (Dh15.7 billion), the Suwon, South Korea-based company said in a statement. That lagged behind the 5.03 trillion won average of 11 analyst estimates compiled by Bloomberg. Sales gained 11 per cent to 40 trillion won.

Samsung fell the most in more than four months, leading shares of electronics makers lower in Asian trading, as the results added to evidence consumers are holding back on spending. Sony, the world's third-largest television maker, said this week it's concerned growth in demand may slow.

"Demand for technology products is pretty weak," said Lee Jin Woo, a fund manager with KTB Asset Management, which manages $9.9 billion in assets in Seoul. "Investors need to monitor the magnitude of the demand recovery."

The International Monetary Fund yesterday lowered its forecast for US growth this year and 2011, predicting a "slow" rebound restrained by a lack of consumer spending.

Affecting profits

The world's largest economy will grow 2.6 per cent this year, down from the 3.3 per cent projected in July, Washington-based IMF said.

The world economy will expand 4.2 per cent next year, slower than its forecast of 4.3 per cent three months ago.

The weak demand and an oversupply of chips, panels and televisions may further pull down prices, hurting profitability at Samsung and rivals including LG Display, analysts said.

Samsung declined 2.9 per cent to 770,000 won at the close of trading in Seoul, the largest fall since May 17, while South Korea's benchmark Kospi stock index slipped 0.2 per cent. Information-technology stocks in the region fell 0.4 per cent as a group, the biggest drag on the MSCI Asia Pacific index.

"Concerns about the fourth quarter will get more serious," said Kim Young Joon, an analyst at LIG Investment & Securities in Seoul.

"It's becoming increasingly certain profitability from semiconductors will worsen and television margins will stay bad because of prices."

Shares of business-computing companies such as VMware, the largest maker of virtualisation software which helps companies use computers more efficiently, tumbled in the US yesterday on concerns that sluggish economic growth will crimp technology demand.

Elpida Memory, the world's third-largest maker of computer-memory chips, said this week slowing personal-computer demand could damp chip prices and cause the company to miss earnings forecasts.

Panasonic

Boost in stakes

Panasonic, the world's largest maker of rechargeable batteries, spent 525 billion yen (Dh23 billion) to boost stakes in Sanyo Electric and Panasonic Electric Works and expand in energy-related businesses.

Panasonic has 80.98 per cent of Sanyo and 83.93 per cent of Electric Works, the company said in a statement. An offer by Osaka, Japan-based Panasonic to buy shares in the two companies closed yesterday, according to the statement.

The purchases may enable President Fumio Ohtsubo to pursue his plan to expand in solar power systems and energy storage for households as it faces growing competition from Samsung Electronics in the television-making business. Japan's largest home appliances maker owned 50 per cent of Sanyo and 51 per cent of Electric Works when it made the offer to buy shares.

Panasonic fell 1.3 per cent to close at 1,137 yen in Tokyo trading. Sanyo was unchanged at 136 yen and Electric Works was also unchanged at 1,095 yen. Japan's benchmark Nikkei 225 Stock Average dropped 0.1 percent. The announcement was made after the stock market closed for trading.

The world's largest maker of plasma TVs purchased 1.89 billion shares in Sanyo for 138 yen apiece in the offer, the company said in the statement.