Samsung tips record Q3 profit of $7.3bn

Technology

Samsung tips record Q3 profit of $7.3bn

Close

South Korean firm recently launched the Galaxy Note II and Galaxy SIII smartphone.

05 October,2012 01:29 pm

South Koreas Samsung Electronics said Friday it expected a record operating profit of 8.1 trillion won ($7.3 billion) in the third quarter, boosted by sales of its flagship Galaxy smartphones.The estimate beat analyst expectations and came with a predicted 26 percent surge in sales to 52 trillion won in the three months to September, despite uncertainties surrounding Samsungs growing patent battle with Apple Inc.Samsung, the worlds largest technology firm by revenue, was giving earnings guidance before its official results announcement later this month.The projected operating profit for July-September would represent a 90.5 percent rise from a year earlier, and beat the previous record of 6.7 trillion won set in the last quarter.The estimate saw the companys shares rise 1.5 percent to 1.387 million won at the opening in Seoul -- their highest level in five months -- although they later fell back to close at 1.370 million won.Samsungs operating profits have risen every quarter since the first three months of 2011, as booming smartphone sales helped it leapfrog Apple as the worlds biggest maker of the devices.But its shares have been under pressure due to the legal spat with the iPhone manufacturer.Samsung was dealt a blow in late August when a US federal jury ruled that the Korean giant infringed some of Apples design and software patents and fined it more than $1 billion. Samsung has appealed the ruling.The legal duel, being fought in some 10 countries, has mirrored an intense market battle between Samsungs new Galaxy S III smartphone, released in June, and Apples iPhone 5 launched last month.The South Korean firm also launched the Galaxy Note II -- the latest version of its oversized smartphone -- at the end of September.Galaxy S III shipments have been estimated at 18 million units for the third quarter, while smartphone and overall mobile device shipments are projected at 59 million and 106 million units respectively.Some analysts said operating profit at the companys mobile business may fall off slightly in the fourth quarter, partly due to higher marketing costs in the intensely competitive market.The third quarter may be the peak in terms of earnings, said Lee Sun-Tae, an analyst at NH Investment and Securities.The fourth-quarter operating profit is expected to decrease... as slower profit at its telecom unit seems inevitable due to an increase in marketing expenses, Lee said.But James Song at KDB Daewoo Securities said he expected Samsungs mobile sales to maintain their strength and keep profits high, with fourth quarter earnings about the same as the July-September period.Stronger earnings at Samsungs flat-panel display and television businesses helped offset the third quarter performance of the companys chip division, which struggled with falling prices for memory chips used in personal computers.