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Samsung posts forecast-beating quarterly earnings

But quarterly net income reaches 3.44 trillion won, 23 percent down on-year


Samsung Electronics on Friday posted 41.27 trillion won ($37.35 billion) in sales and 4.25 trillion won in operating profit for the third quarter of this year, a better-than-expected performance on the strength of record-breaking sales of mobile handsets.

The world’s top memory chip supplier and second-biggest handset maker also recorded 3.44 trillion won in quarterly net income, representing a 23 percent decrease year-on-year.

Although the company’s operating profit decreased by 12.6 percent compared to the same period last year, its operating profit margin recovered to 10.3 percent.

The mobile communications business of Samsung’s flagship electronics unit reached an all-time high in quarterly sales of 14.9 trillion won, increasing 37 percent from last year. The operating profit in the sector also hit a record of 2.52 trillion won in July-September thanks to the rising popularity of its flagship smartphone Galaxy S and the follow-up Galaxy series.

“Despite the difficult business environment due to the economic slowdown in developed markets, Samsung achieved a solid performance and recovered its double-digit operating profit margin in the quarter, driven by strong sales of our smartphones,” said Robert Yi, vice president and head of investor relations at Samsung.

The semiconductor unit of the firm also saw sales reach 9.48 trillion won in the third quarter, jumping from 9.16 trillion won posted in the previous quarter.

Samsung was the only player among the global DRAM chip makers to be profitable in the third quarter.

Other chipmakers ― Hynix Semiconductor and Japan’s Elpida Memory ― swung to losses after the DRAM chip prices used in PCs dropped about 50 percent in July-September.

For Samsung, increased demand for NAND flash chips, which are used in mobile devices, was among the factors that contributed to the sales increase, according to Yi.

Samsung is currently fostering growth in certain component businesses like mobile dynamic random access memory, NAND flash memory, application processors and OLED panels.

The firm’s liquid crystal display business that had posted losses amounting to 210 billion won in the last quarter lowered its losses figure to 90 billion won.

Yi also said that Samsung expects the sales of mobile devices to remain strong and the shipments of flat panel TVs to increase in the following fourth quarter.

“For DRAM, we saw big growth in the market of about 10 percent,” Yi said. “For the fourth quarter, we expect the growth to be a high single digit.”

By Cho Ji-hyun (sharon@heraldcorp.com)
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