Samsung profits soar on Galaxy, Note sales, but legal damages could hurt

The South Korean electronics maker said its operating profit jumped on surprisingly strong sales of its flagship Galaxy handset
  • (IDG News Service)
  • — 05 October, 2012 08:23

Samsung Electronics said Friday that stronger-than-expected sales of its Galaxy smartphones sent operating profits up 90 percent in the latest quarter, but analysts warned its results could take a hit in the coming months as it books legal damages owed to Apple.

The South Korean electronics giant reported an operating profit of 8.1 trillion won (US$ 7.3 billion) for the July-September period, almost double the 4.25 trillion won it made a year ago. That beat an average analyst estimate of 7.58 trillion won during the quarter compiled by Bloomberg.

The company released the numbers, which did not include its net profit or breakdown for each business group, ahead of its official earnings release on Oct. 26. Operating profit is generally seen as a reflection of business operations, while net profit includes other factors, such as legal fees.

Backed by aggressive marketing prior to the iPhone 5 release, Samsung is expected to have shipped 57 million smartphones in the quarter, according to Jeff Kang, an analyst with Daishin Securities in Seoul.

Samsung probably sold 17 million units of its flagship Galaxy S III and 6 million of its Galaxy Note 2 smartphone-tablet hybrid that launched last week in Korea, according to Won Seo, an analyst with Korea Investment and Securities. In contrast, Apple said sales of its iPhone 5 topped five million in the first three days after its release.

"We lifted our estimates as robust Galaxy S3 sales should bolster handset sales and margins," Seo said, in a research note. "In 4Q, the upswing should continue with the release of the Galaxy Note 2."

The Galaxy S III launched in May, while the Galaxy Note 2 will be available in 128 countries this month.

Samsung may face a dent in its fourth-quarter results as it sets aside money to pay damages to Apple when the U.S. District Court for the Northern District of California finalizes its verdict in December, Seo said.

In August, the U.S. jury ordered Samsung to pay more than $1 billion in damages to Apple for infringing the iPhone maker's design and software patents. Apple subsequently asked for a permanent injunction against sale of Samsung phones including the Galaxy S III, while Samsung has launched lawsuits against Apple products including the iPhone 5.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Yewon Kang

IDG News Service
Comments are now closed.

Latest News Articles

Most Popular Articles

Follow Us

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Resources

Best Deals on GoodGearGuide

Compare & Save

Deals powered by WhistleOut
WhistleOut

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?