Strong smartphone sales helped Samsung Electronics beat market expectations
World's biggest technology company by sales saw operating profits up 85%
Strong global sales of its Galaxy smartphones led record strong increases
The main subject of Apple's intellectual property infringement claims
Strong smartphone sales helped Samsung Electronics beat market expectations in the third quarter, as the world’s biggest technology company by sales achieved an operating profit increase of more than 85 per cent.
The strong results came despite the fact that during the third quarter Samsung was embroiled in a fierce US court battle with Apple, its main smartphone rival, which left it facing a damages bill of more than $1bn for patent infringement.
But strong global sales of its Galaxy smartphones – the main subject of Apple’s intellectual property infringement claims – enabled Samsung to record strong increases in both revenue and profit, revealed in earnings guidance issued on Friday.
Revenue for the quarter was between $46bn and $47.7bn, up from $37.2bn a year before. Operating profit was between $7.1bn and $7.5bn, up from $3.8bn. A Bloomberg poll of analysts had produced a consensus forecast of $6.8bn for operating profit.
Despite the outperformance of the consensus forecast, Samsung’s shares were trading only 0.15 per cent higher at 1.37m won in mid-morning trading in Seoul.
Marcello Ahn, an analyst at Nomura, said investors were taking profits amid concerns that Samsung would not repeat the positive surprise in the fourth quarter. Shares in the company have risen 62 per cent in the past 12 months.
Mr Ahn said strong smartphone sales contrasted with weaker performance at the semiconductor division. This was due to muted demand for memory chips from the PC market, and a later than expected launch for Apple’s iPhone 5, for which Samsung is the biggest supplier of components.
But Mr Ahn forecast another strong quarter in the final three months of the year, citing the recent launch of the Galaxy Note 2 tablet and an improved contribution from European sales as a result of a stronger euro.
Samsung and Apple are continuing to tussle over the fallout from August’s California court decision. Last month, Apple asked the judge to increase the damages award by $707m. Samsung responded this week by adding the iPhone 5 to a list of products that it says infringe its patents on data transfer technology. On Wednesday, Samsung also called for a new trial in the high-profile US patent case, citing concerns about one of the jurors.