South Korean conglomerate Samsung Electronics Co. Ltd. (SSNLF) reported late Thursday a profit for the third quarter that nearly doubled from last year as the rising sales in high-end Galaxy S and S3 smartphones more than offset a slump in its semiconductor business. Sales and operating profit for the quarter came in line with Samsung's guidance released earlier in the month.
Samsung has hit a new record in operating profit for the fourth consecutive quarter, and its quarterly sales have breached the 50 trillion won mark for the first time. Samsung's mobile business is said to have accounted for nearly 70 percent of the operating profit.
Samsung has reportedly beaten rival US technology giant Apple, Inc. (AAPL) hands down in third-quarter smartphone shipments, selling about 58 million units and taking 35 percent share of the global smartphone market, more than double the 26.9 million iPhones sold by Apple.
Samsung is expected to continue its strong lead in smartphone shipments with the S3 and Galaxy Note 2 phablet, a hybrid of a mini tablet and smartphone equipped with a pen and a larger screen than the S3, despite rival Apple launching the new iPhone 5 last month.
Many of Samsung's devices have been banned in the U.S. market following a patent trial verdict, but the ban was lifted in late September for the Galaxy Tab 10.1 that was banned several months ago. The ban was also lifted in mid-October in the U.S. for Galaxy Nexus, a smartphone co-developed by Google and Samsung, and running on Google's Android operating system.
The launch of new smartphones running on Microsoft Corp.'s (MSFT) new Windows operating system is likely to boost Samsung's semiconductor business with higher sales of mobile chips.
Suwon, South Korea-based Samsung is forecast to sell 220 million smartphones in 2012, more than double the amount it shipped in 2011. It ended Nokia Corp.'s (NOK) decade-long dominance in the mobile phone market in 2011.
Samsung said demand is expected to be led by smartphones and in emerging markets amid year-end seasonal effect and expanded new product competition.
The world's largest technology firm by revenue reported net profit of 6.56 trillion won or $6.0 billion for the third quarter, up 91 percent from 3.44 trillion won in the prior-year quarter, and higher than 5.19 trillion won in the preceding second quarter.
Total sales for the quarter increased 26 percent to 52.18 trillion won from last year's 41.27 trillion won, and also grew from 47.60 trillion won in the prior quarter.
Total operating profit surged 91 percent to 8.12 trillion won, with operating margin expanding 530 basis points to 15.6 percent from a year ago.
Earlier in the month, Samsung had estimated third-quarter sales of about 52 trillion won, with an operating profit of about 8.10 trillion won.
Quarterly sales at Samsung's telecommunication division surged 67 percent to 29.92 trillion won, with 82 percent growth in mobiles sales.
Meanwhile, sales at the semiconductor division, once the main source of income for the company, declined 8 percent to 8.72 trillion won, with memory sales dropping 5 percent. Though PC DRAM demand continued to be weak, NAND demand increased due to new mobile device launches towards the end of the third quarter.
Display panel division's sales grew 19 percent to 8.46 trillion won, despite LCD panel sales edging down 0.5 percent, as sales of OLED panels increased amid new smartphone product launches. TV panel shipment grew in mid-10 percentage from last year.
Samsung is said to be introducing new technologies including OLED, 3-D and Internet-enabled Smart TVs to reverse slowing industry sales.
Samsung shares are currently trading down 26,000 won or 1.97% in Friday's regular trading session at 1,296,000 won on the Kospi on a volume of 65,690 million shares.
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