Saida Online Magazine


MAIN PAGE / BUSINESS & FINANCE / Samsung reports record quarterly profit

Samsung reports record quarterly profit
Post Your Comment  17 views
Samsung reports record quarterly profit Samsung Electronics, the world's largest technology company by sales, reported record net profit for the third quarter as booming sales of its smartphones and flat panels offset slowing demand for memory chips.

But the South Korean company expects competition to intensify in the current quarter amid the global economic slowdown, although strong demand in the run-up to the Christmas period is expected to boost demand for mobile devices.

"Looking ahead, for the remaining quarter, year-end seasonality will push up demand for mobile devices including tablet PCs, as new products make their way into markets with more competitive pricing," the company said on Friday.

Overall, the company's net profit surged 91 per cent to Won6.56tn ($5.9bn), while operating profit also jumped 91 per cent to Won8.12tn and sales increased 26 per cent to Won52.18tn.

Operating profit from the mobile division more than doubled to Won5.63tn in the quarter from Y2.42tn a year ago while Samsung's display panel business also swung to an operating profit of Won1.09tn from a Won90bn loss a year earlier. But earnings from the semiconductor division fell 28 per cent to Won1.15tn.

Analysts expect earnings momentum to slow in coming quarters as Samsung is likely to cede some market share to Apple, which recently introduced the iPhone 5 and iPad mini.

Samsung did not disclose its smartphone shipments for the third quarter but, according to research firm Strategy Analytics, Samsung sold 56.9m smartphones in the third quarter with a record 35 per cent market share while Apple sold 26.9m smartphones with a 17 per cent share.

Samsung expected demand for D-Ram chips, used in computers, to remain weak amid oversupply while sales of home appliances will slow down amid Europe's protracted debt crisis and the US economic slowdown. Still, it aims to beat the market growth as global computer memory chip shipments are forecast to increase by about 10 per cent in the current quarter while those of Nand chips, used in mobile devices, to increase more than 20 per cent.

Shares of Samsung fell 1.8 per cent to Won1.298m on Friday on concerns about its earnings outlook, compared with a 0.8 per cent fall for the benchmark Kospi index.

Flat panel rival LG Display on Friday reported its first quarterly profit in two years, bolstered by strong sales of its displays used in Apple's iPhone and iPad. The world's second-largest flat-panel maker by sales said net profit was Won158bn in the third quarter, compared with a Won687.5bn loss a year earlier.

Samsung's strong third-quarter results came despite its legal defeat to Apple in a US court, where the company was ordered to pay more than $1bn to Apple in damages for patent infringement. Samsung and Apple are embroiled in more than 30 lawsuits on four continents against each other.

Suh Won-seok, an analyst at Korea Investment & Securities, expects Samsung's earnings from its mobile division to fall next year as the smartphone market growth slows, but said the shortfall will be offset by increasing earnings from its component businesses such as chips and display panels. "The explosive growth of smartphones will slow in 2013, driving down average selling prices, but we expect to see an improvement in semiconductors and display panels," he said.

He forecast that the global smartphone market to grow 34 per cent to 285m units in 2013 but average selling prices of smartphones to fall 9 per cent to $273. But he expects Samsung to post Won30tn in 2013 operating profit, up 17 per cent from this year, while sales are forecast to grow 7 per cent to Won212tn.

Source Financial Times

صيدا أون لاين