South Korean electronics manufacturer, Samsung, has recently reported quarterly profits of $7.3 billion. The statement was made on Friday, October 5th and marks the fourth straight quarter of record earnings for the global leader in mobile devices. Samsung managed to double their profit from the same time last year and the latest report showcases the company’s extraordinary growth over the last year. Some analysts did not expect Samsung to have another blockbuster quarter after it was revealed that Apple was cutting back on processors and displays from the South Korean conglomerate. However, strong sales from the Galaxy line of phones were able to more than cover for any losses and keep the growth rate going strong for Samsung.
The $200 billion worldwide smartphone market is heating up and Samsung has created a leading position globally. With competitors offering new devices every few months and Apple releasing its latest iPhone 5, Samsung is expected to spend a lot more on its marketing in the upcoming quarter. This may end its record run so far. Further reasons for a lower quarter next time around also include the fact that the company earned record profits of $25 billion this year. The stellar performance is the result of the hard work of the employees of the firm who will also be receiving performance based bonuses next year. With 206,000 employees in total, Samsung will be a paying out a hefty sum to its valuable human resource team.
Samsung may also have to put some money aside in case the firm loses its appeal in a lawsuit filed by Apple. On August 24 Apple won more than $1 billion in a patent case in the U.S. (TQ was on it). Overall, industry analysts believe that Samsung’s record run is all but over, as they expect that earnings will keep declining until the middle of next year. The lower expectations are tied into the fact that a slowdown in the sales of computers will reduce the demand for chips and other parts that Samsung manufacturers. A slow global economy will also play its part in reducing the break neck growth rate for Samsung.
The full results for the quarter are expected on October 26 and estimates from Samsung show that it beats analyst’s forecasts by a large margin. A Reuters analyst survey revealed that Samsung would be expected to hit 7.6 billion won operating profits for the quarter. However, the company ended up beating the forecast after a 91 percent jump from last year to 8.1 trillion won. The Korean technology giant’s mobile unit is expected to be the reason for two thirds of total profit with 5 trillion won. Estimates claim that the shipment of smartphones has touched 58 million with 18 to 20 million of those units being flagship model Galaxy S III’s.
Source: Reuters
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