Samsung Posts Lower Profits, Higher Sales

By Steve Smith -- TWICE, 10/28/2011

Seoul, South Korea - Samsung Electronics reported lower net income but slightly higher revenue for the third quarter, ended Sept. 30.

Revenues were 41.27 trillion Korean won on a consolidated basis a 3 percent increase year on year.

For the quarter, the company posted consolidated net income of 3.44 trillion won, representing a 23 percent decrease year on year.

The telecommunications businesses recorded all-time high quarterly sales of 14.9 trillion won, up 37 percent from the previous year, with growth mainly driven by strong sales of Samsung's Galaxy smartphones. Operating profit for the businesses also hit a record 2.52 trillion won, Samsung said.

Samsung's mobile communications business saw revenues rise 39 percent year on year to 14.42 trillion won. Handset shipments rose more than 20 percent quarter on quarter, driven by growth in the smartphone segment where sales were up more than 40 percent quarter on quarter and 300 percent year on year. Samsung continued the global rollout of its flagship Galaxy SII, which has now sold more than 10 million units in the five months since its introduction.

"Despite the difficult business environment due to the economic slowdown in developed markets, Samsung achieved a solid performance and recovered its double-digit operating profit margin in the quarter, driven by strong sales of our smartphones," said Robert Yi, VP and head of investor relations, in a statement.

The digital media and appliances businesses -- including visual display, IT solutions, digital imaging and digital appliances -- posted revenues of 14.36 trillion won for the third quarter.

Samsung's shipments of flat-panel TVs outstripped market growth of more than 10 percent quarter on quarter, which was led by demand in emerging markets. Profitability also improved quarter on quarter as LED TV sales passed 50 percent of all Samsung LCD TVs sold for the quarter, reflecting the growing acceptance of the new technology, the company said.

With peak season demand in the fourth quarter expected to increase 30 percent quarter on quarter, Samsung said it aims to outperform the market and enhance profitability through marketing and sales expansion of premium products such as LED TVs and Smart TVs supported by customized TV applications.

Looking ahead into the fourth quarter -- when industry demand is traditionally at its peak -- Samsung said it expects sales of mobile devices to remain strong and flat-panel TV shipments to increase. However, Yi cautioned that due to lingering global economic uncertainties, "we cannot rule out the possibility of demand growth slowing compared to previous years."