Surprise Q3 Results for Samsung Electronics

Electronics giant posts Q3 sales of 41 tln won and operating profit of 10.9 tln won amid global slowdown and Apple lawsuits

Samsung Electronics posted surprising third quarter results with sales revenue of 41 trillion won, up 1.9 percent YoY, and operating profit down 13.6 percent YoY, a smaller drop than the estimates, preliminary figures showed.
The largest electronics maker in Korea recorded sales of 40.23 trillion won in the same period last year and 4.86 trillion won in operating profit last year, the company said.
The sales revenue during the first three quarters came to 117.42 trillion won, up 4.1 percent YoY, with operating profit down 23.7 percent YoY at 10.9 trillion won, the company said. The results are more astounding as they came amid a global economic slump and lawsuits brought against the company by Apple.
The company's operating profit is about 1 trillion won more than estimated by securities analysts, which for the first time in the company's history exceeded 10 percent of sales revenue. The surprising record has been attributed to smartphone sales rising more than 40 percent from the previous quarter, ranging from 26 million to 28 million units, bringing the total operating profit of communication equipment to more than 2 trillion won.
The semiconductor sector did all right, too, despite the fall in prices of DRAM chips, thanks to cuts in costs and excellent sales of specialty products, including application processors, as well as growth in the production of LSI, posting about 1.3 trillion won in operating profit.
Amid global economic uncertainty and slumping sales of TV sets around the world, the company has been able to secure a dominant share of the smart TV and other premium electronics product markets to keep its sales rising.
But the LCD sector continued to bleed red ink for three consecutive quarters this year.
Securities analysts project Samsung Electronics would have a better fourth quarter with prices of chips and LCDs expected to recover, along with the release of new models of smartphones and tablet PCs.
They singled out the sales of the Galaxy S2, which rocketed to 3.6 million units in the four months through September, claiming 55 percent of the domestic cellphone market, which has been of great help to Samsung's outstanding results.
The smartphone sold more than 10 million units around the world since its introduction five months ago, the fastest for any handset's sales to reach that mark. The Samsung phone has been a top seller in Europe, surpassing Apple and Nokia, despite Apple's lawsuits to bar the sale of the Galaxy Tab in a number of major markets for smartphones, including Korea, the United States, Europe and Australia, industry sources said.
As such, smartphones and other wireless communication products have been the bread and butter for the company's surprising earnings in Q3.
The court in Dusseldorf, Germany, ordered the suspension of the sale of the Galaxy Tab 10.1 in that country, upholding the decision of a lawsuit brought against the Samsung product by Apple.
Samsung officials commented that the company coped with competition from its rivals with its diverse product lineup.
They added that the impact from the Apple lawsuit over intellectual property rights infringement is limited, while the appeal of Samsung's products will be determined by the consumers. nw

Vice Chairman Choi Ji-song of Samsung Electronics Co.

Photo on courtesy of Samsung Electronics