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Samsung Posts Hefty Sales, Profit Increases

11/04/2012 07:00:00 PM Eastern

SEOUL, SOUTH KOREA — Samsung Electronics reported double-digit gains in revenues and profits for the third quarter, ended Sept. 30, based on in- creased sales of cellphones and stronger demand for display panels.

Revenues were 52.18 trillion Korean won on a consolidated basis for the third quarter, a 26 per- cent increase year on year. For the quarter, con- solidated operating profit reached an all-time high of 8.12 trillion won, representing a 91 percent in- crease year on year, Samsung said.

Consolidated net profit for the July through Sep- tember period was 6.56 trillion won. That was higher than the consolidated net income of 3.44 trillion won for the prior year’s third quarter.

The mobile communications business posted 26.25 trillion won in revenue for the quarter, ac- counting for more than half of Samsung’s total rev- enue. As for the display panel segment, increased shipments of OLED and LCD panels used in tab- lets and smartphones, as well as TVs, drove up profitability.

Despite global economic uncertainties, Sam- sung’s end-product and components business units saw sales climb compared with the same quarter last year. Digital media and communica- tions — comprising the consumer electronics and IT and mobile communications business sectors — accounted for 41.90 trillion won in sales, up 41 percent year on year.

For device solutions, operating profits reached 2.29 trillion won on revenue of 17.40 trillion won. The display panel segment outperformed the semicon- ductor business, in terms of on-year revenue growth.

The display panel segment achieved an operating profit of 1.09 trillion won on revenue of 8.46 trillion won. This represented a 19 percent increase in year- on-year sales for the quarter and a swing into profit- ability compared with the same period last year.

The overall panel market exhibited quarter-on-quar- ter growth with demand rising 2 percent on the back of new tablet products and emerging market growth, despite delayed demand recovery in developed mar- kets. Shipments of TV panels enjoyed a steady 9 per- cent increase compared with the second quarter as manufacturers prepared for the year-end peak season, although sales of panels for notebook PCs and moni- tors remained weak, the company said.

Samsung saw strong growth momentum in the OLED panel segment due to demand for high-end smartphones. Sales of high value-added products, such as LED panels for TVs and LCD panels for tab- lets, continued to rise. Overall, Samsung’s third-quar- ter TV panel shipments saw year-on-year growth in the mid 10 percent range.

The IT and mobile communications division, com- prising mobile communications, telecommunication systems, IT solutions and digital imaging, ended the third quarter with operating profits of 5.63 trillion won on 29.92 trillion won in revenue. Operating profits for the division saw 132 percent year-on-year growth. The mobile unit alone was responsible for 26.25 tril- lion won in revenue, resulting in an 82 percent spurt in growth compared with the same quarter a year ago, Samsung said.

The global market for smartphones increased in the low 10 percent range quarter-on-quarter, while that of feature phones saw growth of around 10 percent on- quarter. Samsung’s flagship Galaxy S III smartphone, along with diverse smart device offerings which en- compass high- to low-end products, have been the key drivers in raising profit margins. Improvements in the product mix also led to a more competitive average selling price, Samsung said.

Also in the third quarter, orders for Galaxy Tab vari- ants were strong, as well as the Galaxy Note 10.1, which redefined functionality through its S Pen sty- lus and split screen feature. Sales of LTE wireless broadband technology equipment picked up in the third quarter but tougher price competition dampened profit margins.

The consumer electronics division — encompassing the visual display and digital appliances businesses — posted revenue of 11.6 trillion won for the third quarter. The operating profit of 430 billion won amounted to an increase of 38 percent compared with the corre- sponding period last year but was down on the previ- ous quarter.

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