Samsung Posts Record Profit, But Gave A Cautious Outlook

The South Korean electronics giant posted a record $9.6 billion quarterly net income owing to growth in the chip business and increased sales of its cheaper handsets as sales of smartphones decreased. Samsung has posted record profits in past six quarters out of seven, but the company also warned the investors of expected decrease in sales due to poor response from the global market, and rise in competition. The recent launches by the company may also fail to increase the sale.

Record numbers

The Korean company posted an operating profit of 10.2 trillion won ($9.6 billion) for the three-month period ended September, a 26 percent rise over the last year, and a 7 percent rise from the last quarter.  The company reported total sales of 59.1 trillion won ($55.5 billion) for the quarter.

The net income came in at 8.05 trillion won ($7.6 billion), which was a 25 percent increase, from 6.42 trillion in the third quarter of last fiscal. The quarterly results were in line with the earnings guidance released earlier.

Segment wise performance

A recovery in the Samsung’s semiconductor business was the primary reason for such impressive numbers. Semiconductor segment recorded an operating profit of 2.06 trillion won ($1.93 billion), more than double the 1.02 trillion won a year earlier. This has been seen as the best performance in three years from the company’s chip business, which got a setback due to the global gut of chips.

The mobile division of Samsung, which contributes to two thirds of its revenue, recorded an operating profit of 6.7 trillion won ($6.3 billion), an increase from 5.63 trillion won in the last year. The high segment smartphones demand dropped in the quarter, but the divisions profits were up due to the sale of its cheaper models in upcoming markets like China, South America, and Eastern Europe.

Galaxy S4 achieving milestone

The sale of flagship Galaxy S4 reached 40 million unit recently, which again scaled the earnings for Samsung. The Galaxy S4 went on sale in April, and within a span of four weeks sales jumped to 10 million. The sales reached 20 million earlier in July. In between there were concerns that the sales of flagship model might have slowed, but the latest 40 million milestone indicates the growing popularity for the 5-inch smartphone.