Samsung Reports Its Best Earnings Ever in Q3 2012

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Samsung Electronics Co., Ltd. (LON:BC94), the world’s leading smartphone  manufacturer reported its best earnings performance ever, with an operating profit of $7.3 billion (8.1 trillion won) during the third quarter of 2012, boosted by strong sales of Galaxy smartphones and TVs.

According to the report from Bloomberg, Samsung’s operating profit exceeded the $7.58 billion average consensus estimate of 34 analysts. The figure nearly doubled its $3.85 billion earnings during the same period last year.

Samsung Reports Its Best Earnings Ever in Q3 2012

Samsung Electronics Co., Ltd. (LON:BC94) reported approximately 52 trillion won in consolidated sales, slightly higher than the 51.6 trillion analysts expectations.

The sales performance of Galaxy smartphones offset the reduction of Apple Inc. (NASDAQ:AAPL)’s orders for chips and screens. The Cupertino-based tech giant reduced its orders from the South-Korean electronics company, due to their ongoing patent infringement battle in the United States and other countries worldwide.

During an interview with Bloomberg, Mark Newman, senior analyst of Sanford C. Bernstein, in Hong Kong, commented that the South Korean electronics company’s sales performance worldwide was outstanding, despite the litigation against Apple. He expects Samsung to grow more. Newman said, “Sales have been very, very good around the world, despite the best efforts of Apple to restrain them. There’s a lot of growth left in the company, and I would think that it can go a lot higher.”

The introduction of the Samsung Galaxy S3 and the Galaxy Note increased the earnings of the South Korean company’s mobile business by 93 percent during the third quarter.

Samsung Electronics sold 20 million units of Samsung Galaxy S3 during the first 100 days of availability in the market, since its launching in May. The Galaxy Note sold more than 10 million units.

Some analysts believe that Samsung Electronics Co., Ltd. (LON:BC94)’s fourth quarter will be challenging, due to high marketing expenditures, particularly during the recently concluded Olympic Games in London, and promotion of the Galaxy Note II. Based on the estimated of Credit Suisse, Samsung spent $2.7 billion in marketing.

In addition, Samsung’s financial performance next quarter might be also affected by high payouts to its employees, and most importantly the 1.05 billion payment to Apple (NASDAQ:AAPL) for damages in the patent infringement case.

On the other hand, a majority of analysts believed that Samsung’s profit would continue to grow until the second quarter of fiscal 2013. Byun Han-joon, an analyst at KB Investment & Securities, said the iPhone 5 is the strongest competitor of Samsung smartphones.



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