Samsung Profits Jump by 17% on Record Revenues
Published on: 29th Oct 2010
Note -- this news article is more than a year old.
South Korea's Samsung Electronics has reported that its third quarter revenues rose by 12 percent to a record of KRW 40.23 trillion (USD35.74 billion), while net profits rose by 17 percent to KRW 4.46 trillion (USD3.96 billion). Consolidated operating profit for the quarter was KRW 4.86 trillion. Provisions for various patent related expenses totaling KRW 230 billion were reflected to third quarter earnings. Without these provisions, operating profit would have been close to KRW 5.1 trillion.
The company's increased profitability in the third quarter was driven by the strong performance of its Semiconductor Business. The Mobile Communications Business also achieved solid growth with profit supported by increased sales of flagship smartphones such as the Galaxy S.
"In the third quarter, Samsung faced a challenging business environment including declining demand for PCs and TVs, along with a continued economic slowdown in developed markets such as US and Europe," said Robert Yi, Vice President and head of Samsung Electronics' Investor Relations Team. "Despite this, we achieved strong revenue growth and profitability, which was built upon our cost competitiveness in memory semiconductors and increased sales of cutting-edge products such as our latest smartphones."
Looking ahead to the fourth quarter, year-end demand for TVs and mobile handsets will support continued sales growth. However, Samsung expects oversupply in the memory semiconductor market will lead to reduced pricing, while prices for LCD panel will continue to decline. The recent appreciation of the Korean won is also expected to put downward pressure on fourth quarter earnings.
The telecommunication businesses - including Mobile Communications and Telecommunication Networks - posted an operating profit of KRW 1.13 trillion on revenue of KRW 11.12 trillion. The operating profit margin was 10.2 percent.
In the Mobile Communications Business, Samsung sold 71.4 million handsets during the third quarter, an increase of 19 percent year-on-year, outperforming the industry. Average sales price also increased 14 percent quarter-on-quarter. The rollout of Samsung's flagship smartphones, Galaxy S and Wave, were the primary drivers of continued sales growth amid a global demand recovery.
In the fourth quarter, Samsung aims to increase its market share and maintain double-digit operating profit by meeting seasonal demand with an enhanced product mix of mass market smartphones, full-touch phones and the Galaxy Tab.