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Samsung posts record profit

Oct 26 2012 07:59 AFP
Samsung Galaxy Note

Samsung's legal battle with Apple has been bolstered by word that the US Patent and Trademark Office was second-guessing a patent at issue in the case. (Mark Lennihan, AP)

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Seoul - Samsung Electronics said on Friday net profit almost doubled to a record 6.6 trillion won ($5.97bn) in the third quarter, powered by strong smartphone sales and huge demand for display panels.

The world's largest technology firm by revenue also saw a record operating profit in July-September of 8.12 trillion won, up 91% from the same period last year.

Samsung said its mobile communications business took in 26.25 trillion won in revenue for the quarter, accounting for more than half the company's total.

"The business environment remained difficult with global economic uncertainties persisting amid the fiscal concerns in the US and Europe," said Samsung Senior Vice President Robert Yi.

"However, we continued to break our quarterly profit records," Yi said.

The third quarter net profit figure was well up from the 3.4 trillion won net profit posted a year ago and beat the previous record of 5.19 trillion won set in April-June.

Sales surged 26.4% on-year to an all-time high of 52.2 trillion won.

Analysts expect the technology giant to see a marginal fall in income in the final quarter, as sales to retailers peak in the third quarter ahead of the holiday season and technology companies ramp up spending on marketing for the year-end rush.

However, they said Samsung's telecommunications business will continue to drive profit with its latest offerings of high-end mobile products, such as its flagship Galaxy S III smartphone.

"We expect Samsung will deliver solid earnings growth with product leadership in the consumer branded business, smartphone and TV, and enhanced bargaining power in the component business, semiconductor and display panel," Citi said in a report.

However, Samsung shares were down 1.8% at 1.298 million won in morning trade on profit taking, brokers said.

The company said its display panel business helped drive its record, with a 1.1 trillion won operating profit in the third quarter, compared to a 90 billion won loss the previous year.

Increasing demand for panels for smartphones and other high valued-added products, such as LED panels for TVs and LCD panels for tablets, offset weak demand for laptop and monitor panels.

Samsung's operating profits have risen every quarter since the first three months of 2011, as booming smartphone sales helped it leapfrog Apple as the world's biggest maker of the devices.

But its shares have been under pressure due to a long-running legal spat with the iPhone manufacturer.

Samsung was dealt a blow in late August when a US federal jury ruled that it infringed some of Apple's design and software patents and fined it more than $1bn. Samsung has appealed against the ruling.

The legal duel, being fought in some 10 countries, has mirrored an intense market battle between the Galaxy and iPhone.

On top of the competition for the smartphone market the firms are also tussling over the tablet market.

The South Korean firm launched the Galaxy Note II - the latest version of its oversized smartphone - at the end of September and this week Apple unveiled the iPad Mini.

Galaxy S III shipments have been estimated at 18 million units for the third quarter, while smartphone and overall mobile device shipments are projected at 59 million and 106 million units respectively.

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