Samsung net income soars
Samsung Electronics reported record profit that beat analysts' estimates and said competition likely will intensify this quarter as the global economy slows.
Net income in the three months ended September 30 rose 91 per cent to 6.56 trillion won (€4.64 billion), the South Korea-based company said in a statement today.
The average of 27 analysts' estimates compiled by Bloomberg was 6.25 trillion won. Operating profit from telecommunications more than doubled as Samsung's Galaxy devices widened their lead over Apple's iPhone.
Samsung shares dropped amid concern growth in smartphone demand may have peaked after Apple reported earnings that missed estimates and Microsoft Corp. released its Surface tablet, signalling stiffer competition for mobile devices.
"The problem is the worries about the smartphone market peaking," said Lee Jin Woo, a fund manager at Seoul-based KTB Asset Management.
"The question is whether tablets can offset the peak in the smartphone market, but it might take some time. Apple's results refuelled these concerns."
Samsung shares were down 2.1 per cent to 1,294,000 won at 1.53pm in Seoul trading, paring gains this year to 22 per cent.
Galaxy, IPhone 5 Competition likely will increase in the fourth quarter amid a global economic slowdown, Samsung said in a statement today.
The company will focus on high-value products to maintain its momentum and will try to boost sales of tablet computers with more pen-equipped models and cheaper devices, Samsung said.
"We plan to make tablets our new growth engine," the company said in the statement.
Operating profit was 8.12 trillion won, up 91 per cent from 4.25 trillion won the year before.
Sales totalled 52.18 trillion won, equivalent to 19 per cent of South Korea's gross domestic product and up from 41.27 trillion won a year earlier.
More than two-thirds of the earnings were generated by the telecommunications business, where operating profit jumped to 5.63 trillion won from 2.42 trillion won, the company said in the statement.
Sales at the unit totalled 29.92 trillion won, compared with 17.94 trillion won a year earlier.
"The mobile-phone number came out very strong," Kim Young Chan, a Seoul-based analyst at Shinhan Investment, said by phone today.
"It again confirms that there's no real competitor out there other than Apple.”