Samsung Electronics record operating profits beats market expectations
Despite market expectations of a slowing smartphone industry Samsung Electronics has done it again--it hit yet another record high in operating profit in the third quarter of this year.
The electronics giant estimates that its operating profit rose to a record 10.1 trillion won,.. which is roughly nine-and-a-half-billion U.S. dollars, in the July to September period.
That's up 25 percent from the same period last year.
The figures stand in contrast to earlier market projections.
FnGuide had previously predicted the company's operating profit would hover near nine.two billion U.S. dollars.
Meanwhile, the company's sales in the third quarter came in at an estimated 55 billion dollars, up 13 percent from a year earlier and another record high.
Market analysts attribute the record earnings to increasing chip prices and smartphones sales.
The semiconductor market has been experiencing a supply crunch since September, after the world's number two chipmaker SK Hynix had one of its factories burn down.
That led the price of semiconductors to rise by 40 percent over the past month.
But it was the rise in smartphone sales that was the biggest surprise, as it came in the face of an increasingly saturated smartphone market and dwindling growth momentum.
"When the actual numbers come out, we expect that sales of the Galaxy S4 will have dropped in the past quarter. But Samsung has now proven that it can draw profits from its low-end models, and not just from the high-end Galaxy S series or its Note."
Experts see Samsung Electronics posting another record operating profit in the fourth quarter.
While they expect high marketing costs ahead of Black Friday and the holiday seasons in the October to December period to narrow the profit margin, they say higher chip prices will make up the difference and drive up operating profits to yet another new record high.
Yoo Li-an, Arirang News.
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