Samsung profits surge on back of smartphones

Sales up by more than a quarter

Korean electronics giant Samsung has returned record net profits for the third quarter amid booming smartphone sales.
In the approach to Christmas Samsung, the world’s largest technology company by turnover, expects demand for mobiles – particularly those running on LTE of 4G networks – to be further boosted, though it acknowledges there will be “stiff competition.”
Overall the manufacturer’s net profit soared 91 per cent to Won6.56 trillion ($5.9 billion), with operating profit also up 91 per cent to Won8.12 trillion and sales 26 per cent higher at Won52.18 trillion.
Even so, the company’s shares fell 2 per cent in Seoul early today [26th October 2012] amid investor concern that the widespread adoption of smartphones in emerging markets and stiffer competition from rivals could squeeze profit margins on lucrative smartphone sales.
Samsung did not disclose its smartphone shipments for Q3 but analysts claculate the company sold about 58 million units against Apple’s 26.9 million shipments of iPhones.
Samsung’s surging profits come despite its legal defeat earlier this year in a Californian court where it was ordered to pay more than $1 billion to arch rival Apple for design and patent violations.
The pair are still pitted against each other in more than 30 lawsuits on four continents.

* The blaze of publicity surrounding Apple’s latest devices led to the company recording a fall in sales of the iPad and fairly flat iPhone retail figures in Q3. In a three month period that covered just a fortnight of iPhone 5 sales and this week’s launch of the iPad mini and fourth-generation iPad, Apple sold 27 million iPhones and 14 million iPads.
Revenues of $36 billion for the three months to September 29 came in just ahead of Wall Street consensus forecasts, while earnings of $8.67 per share were just below expectations of $8.75. Quarterly net profit grew by 24 per cent year-on-year to $8.2 billion, though Apple warns that tough competition is squeezing profit margins on its devices.

Dave Evans is a long established commentator on both the IT and cellular industries. His current focus is on share price trends within the sector. You can email him here

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