Samsung Quarterly Profit Rises as Galaxy Phones Lure Consumers From Apple

Posted: 07/01/2012 in Technology
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Samsung Electronics Co. (005930), Asia’s largest consumer-electronics company, reported a record quarterly profit on surging sales of Galaxy phones and a one- time gain from selling its hard-disk drive business.

Operating profit (005930) increased 73 percent to 5.2 trillion won ($4.5 billion) in the three months that ended in December, the Suwon, South Korea-based company said in a statement today. That beat the 4.6 trillion-won average of 29 analyst estimates compiled by Bloomberg. Sales rose 12 percent to 47 trillion won.

Mobile-phone sales surpassed a record 300 million units last year as Galaxy smartphones helped win consumers amid competition with Apple Inc.’s iPhone. Samsung, which sold its hard-disk drive business to Seagate Technology Plc, is introducing more mobile devices to offset slumping profits at the chip and flat-screen panel businesses.

“The mobile business is generating a huge chunk of profit now,” James Song, a Seoul-based analyst at Daewoo Securities Co., said by telephone. “It may be getting harder for Apple to catch up because they only have a limited number of models.”

Samsung shares fell 1.4 percent to 1,040,000 won at the 3 p.m. close of trading in Seoul, while the benchmark Kospi index declined 1.1 percent. The stock gained 11 percent in 2011.

Galaxy Sales

Samsung overtook Apple in the third quarter to become the world’s largest smartphone seller after shipping 27.8 million units, market researcher Strategy Analytics said in October. Samsung’s smartphone sales more than tripled during the three- month period from a year ago, and its market share more than doubled, it said.

Samsung probably sold about 32 million smartphones in the fourth quarter, according to an estimate from Dongbu Securities Co., helped by the Galaxy range of devices. Galaxy S II sales, which began in May, surpassed 10 million units quicker than any other Samsung mobile device, the company said in a December statement, without providing a total sales figure for the model.

“They’ll probably roll out more low-end smartphones this year after focusing on high-end models last year,” said Kim Hyung Sik, a Seoul-based analyst at Taurus Investment Securities Co. “By the end of the year, they’ll climb to the top in overall handsets.”

Samsung sold more than 300 million handsets in 2011, according to the statement.

In October, Samsung and software partner Google Inc. (GOOG) unveiled the Galaxy Nexus, powered by the latest Android operating system that features facial-recognition functions. A month earlier, Samsung introduced the Galaxy Note equipped with a 5.3-inch screen and a stylus.




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