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Samsung's Q3 earnings estimated at record high on smartphone sales

English.news.cn   2013-10-04 11:01:02            

SEOUL, Oct. 4 (Xinhua) -- Samsung Electronics, the world's largest maker of smartphones, memory chips and flat screen TVs, said Friday that its third-quarter operating profit hit the new quarterly record high due to robust sales of its Galaxy smartphones, that offset weak performance in the consumer electronics business.

The preliminary operating profit was estimated at 10.1 trillion won (9.4 billion U.S. dollars) in the three months ending Sept. 30, the company said in a statement. It topped the prior record high of the 9.53 trillion won profit in the previous quarter, and was up 25.3 percent from the same period of last year.

Sales were estimated at 59 trillion won in the July-September period, breaching the prior high of 57.46 trillion won tallied in the second quarter. The reading was up 13.1 percent from a year earlier.

Samsung did not unveil its estimates for net profit and a breakdown of each business. The final results will be unveiled later this month following an external audit.

Robust sales of Samsung's flagship smartphones led the record- breaking earnings results. Samsung's smartphone sales reached 85 million units in the third quarter, up more than 10 percent from three months earlier, according to the estimates by Shinhan Investment Corp. analyst Kim Young Chan who estimated the figure of Samsung's third-quarter earnings exactly.

Samsung's smartphones sales were driven primarily by mid- to low-end models, failing to show a marked change in margin improvement. "Despite weak shipments of high-end smartphones such as the Galaxy S4, smartphone division should grow thanks to a sharp rise in shipments of mid- to low-end smartphones," Doh Hyunwoo, an analyst at Mirae Asset Securities in Seoul said before the earnings release.

The solid performance in the handset business offset sluggish demand for TVs produced by Samsung during the third quarter. Seo Won-seok, an analyst at Korea Investment & Securities, attributed the sluggish TV demand to the termination of subsidies offered by the Chinese government and a wave of falls in flat-panel TV prices, saying that it led to weak performance in the display panel business.

Samsung's fourth-quarter earnings would continue its record- breaking trend due to growth of sales in high-end products such as Galaxy Note 3, whose sales were estimated to increase from 4 million units in the third quarter to 10 million units in the fourth quarter.

"Sales of Galaxy Note 3 released in September are expected to pick up. We forecast 10 million units will be sold in the fourth quarter. Samsung's total smartphone sales are projected to increase to 91 million units in the fourth quarter," said Kim at Shinhan.

Samsung's semiconductor sector was forecast to show outperformance in the fourth quarter due to the expected rise in chip prices caused by the fire at the Chinese plant of SK Hynix, the world's second-biggest memory chip maker.

"Semiconductor operating profit is forecast to jump more than 30 percent on-quarter in the fourth quarter, with application processor (AP) shipments for Apple's new iPhone and iPad models to drive up system LSI earnings and the sharp increase in memory prices after the fire at SK Hynix' Chinese plant," said Doh at Mirae Asset Securities.

Editor: Zhu Ningzhu
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