Friday, October 26, 2012
Samsung Posts Profit, Enjoys Strong Handset Sales
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Samsung Electronics posted a fourth straight record quarterly
profit of $7.4 billion, boosted by solid sales of its Galaxy range
of phones despite the lower sales of memory chips.
The South Korean company announced revenues of 52.18 trillion
Korean won on a consolidated basis for the third quarter ended
September 30, 2012, a 26-percent increase year-on-year. For the
quarter, the company's consolidated operating profit reached an
all-time high of 8.12 trillion won, representing a 91-percent
increase year-on-year. Consolidated net profit for the
July-September period was 6.56 trillion won.
Samsung's solid performance is mainly attributed to increased sales
of handheld phones and stronger demand for display panels. The
company's Mobile Communications Business posted 26.25 trillion won
in revenue for the quarter, accounting for more than half of
Samsung's total revenue.
Samsung sold 56.3 million smartphones in the third quarter,
according to research firm IDC, giving it a global market share of
31.3 percent - more than double that of Apple, which said it sold
26.9 million iPhones.
As for the display panel segment, increased shipments of Organic
Light-Emitting Diode (OLED) and Liquid Crystal Display panels used
in tablets and smartphones, as well as TVs drove up profitability.
Despite global economic uncertainties, Samsung's end-product and
components business units saw sales climb compared with the same
quarter last year. Digital Media & Communications - comprising the
Consumer Electronics and IT & Mobile Communications business
sectors - accounted for 41.90 trillion won in sales, up 41 percent
For Device Solutions, operating profits reached 2.29 trillion won
on revenue of 17.40 trillion won. The Display Panel segment
outperformed the Semiconductor Business, in terms of on-year
revenue growth. On the currency market front, the depreciation of
the euro and local currencies in emerging markets chipped away
Samsung's bottom line by 570 billion won for the quarter.
"The business environment remained difficult with global economic
uncertainties persisting amid the fiscal concerns in the US and
Europe. However, we continued to break our quarterly profit
records," said Robert Yi, Senior Vice President and Head of
Mr. Yi said he expects market competition to intensify but "we will
do our best to sustain our earnings momentum throughout the fourth
quarter by implementing strategies we have developed for our
Looking ahead, for the remaining quarter, Samsung expects year-end seasonality to
push up demand for mobile devices including tablet PCs, as new
products make their way into markets with more competitive pricing.
Year-end holiday promotions, robust demand in emerging markets and
China's New Year holiday effect are expected to shore up global
demand for IT products. The compan expects demand for PC DRAM to be weak due to
oversupply, and sales of digital appliances will slow down due to
unfavorable market conditions in developed economies.
During the conference call, Samsung said it has begun selling logic chips using a finer 28nm processing technology. As part of a strategy to cut its reliance on the volatile and cyclical memory chip business, the firm has been investing more in profitable logic chip business.
Samsung has also vowed to further strengthen its memory chip business by planning to mass produce advanced flash memory chips using a finer 10nm technology this year.
Samsung said it will book patent-related provisions once a U.S.
court rules on its litigation with Apple. A U.S. federal jury said
in August that Samsung had copied key features of the iPhone,
awarding Apple $1.05 billion in damages. Apple has since asked for
another $707 million, and the California court is set to rule on
that in early December.