Seoul: Samsung Electronics Co., the world's second-largest maker of mobile phones, reported profits that beat analysts' estimates as demand for Galaxy smartphones outweighed slumping sales of displays and semiconductors.
Operating profit in the three months ended September was 4.2 trillion won (Dh13.2 billion), the Suwon, South Korea-based company said in a statement yesterday, more than the 3.7 trillion won average of 28 analysts' estimates compiled by Bloomberg. The company had a profit of 4.86 trillion won a year earlier.
Samsung joins HTC Corp. in benefiting from the popularity of mobile devices running Google Inc.'s Android software. The gains in smartphones, where Samsung is second only to Apple Inc., helped offset falling profit from the biggest business of selling memory chips and flat-screen panels.
"I'm quite amazed," said Lee Seung Woo, a Seoul-based analyst at Shinyoung Securities Co. "It seems like there was a big surprise on the smartphone side."
Samsung rose 0.6 per cent to 860,000 won at the 3pm close of trading in Seoul, after earlier climbing as much as three per cent. The benchmark Kospi index gained 2.9 per cent.
Higher operating profit
Operating profit may be 200 billion won higher or lower than yesterday's preliminary estimate when audited results are announced later this month, Samsung said. The company didn't provide net income figures and a breakdown of divisional earnings. Sales rose 1.9 per cent to 41 trillion won.
Profit at the telecommunications unit likely jumped 76 per cent to 1.99 trillion won, according to a Bloomberg News survey of six analysts. Sales at the division may have gained 28 per cent to 14.21 trillion won.
The company, which aims to sell more than 60 million smartphones this year, probably shipped half of that in the third quarter, Shinyoung's Lee said.
Target looking likely
Samsung will likely meet its target to sell more than 300 million handsets this year, including basic models, J.K. Shin, head of Samsung's mobile-phone division, said on September 26.
The South Korean company's sales accelerated from the second quarter after it began selling the Galaxy S II, a successor to its best-selling Android device introduced last year to counter Apple's iPhone. The latest 4.27-inch model was unveiled in February.
The company has rolled out a new version of the Galaxy S II that supports faster fourth-generation networks using the long- term evolution, or LTE, technology, a feature lacking in the latest iPhone.
