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Samsung announces 13% drop in quarterly earnings

By Jiyeon Lee, CNN
updated 5:10 AM EDT, Fri October 28, 2011
Models hold the new Samsung Galaxy Nexus Android phone during its official launch in Hong Kong on October 19, 2011.
Models hold the new Samsung Galaxy Nexus Android phone during its official launch in Hong Kong on October 19, 2011.
STORY HIGHLIGHTS
  • The loss comes amid a record high performance in mobile sales
  • The electronics giant saw 4.25 trillion won ($3.8 billion) in operating profit

SEOUL (CNN) -- Samsung Electronics on Friday announced a 13% drop in its quarterly earnings despite a record high performance in mobile phone and smartphone sales.

The electronics giant saw 4.25 trillion won ($3.8 billion) in operating profit and 41.3 trillion won ($36.9 billion) in sales. Sales are up by 3% from last year.

Operating profit was down from the 4.86 trillion a year ago, but bounced back by 13% compared with the previous quarter.

Sales in the telecommunications sector surged by 37% compared with the previous year, and operating profit more than doubled, achieving a record high 2.52 trillion won ($2.25 billion).

The strong performance in mobile sales was overshadowed by weak performance in the semiconductor division.

Analysts say the sluggish semiconductor market in general is to blame.

"Samsung didn't receive good results because the IT sector is in a good economy. The numbers we're seeing now are because Samsung did well for itself," said Lee Sung Tae at Meritz Securities in Seoul.

Lee said the transition from heavy reliance on memory chips to nonmemory sectors such as handsets has contributed to the global technology company's earnings and the electronics giant will continue its drive in other sectors.

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