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Samsung Posts Lower Profits, Higher Sales

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.

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.”