Samsung Profits On Mobile Phones, Chips - InformationWeek

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11/2/2009
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Samsung Profits On Mobile Phones, Chips

Earnings were the highest quarterly profit in the company's history. Its chip business took the lead, and handset profits also rose.

Samsung posted a profit of about $3.14 billion for the third quarter, thanks to gains in its chip business, and the success of its mobile phone division.

The earnings were the highest quarterly profit in the company's history, and more than triple the earnings for the same period last year. The company's individual businesses all posted gains in operating profits, and its chip business was the most profitable with a 17.6% profit margin. Overall, Samsung posted revenues of $20.9 billion.

The company remains the second-largest handset maker in the world, trailing Nokia, and it shipped a company record 60.2 million phones, a 16% increase from the same period last year. Samsung's average selling price did dip to about $120 per unit, but its profit margin rose to 7.7%.

"This was the first time a vendor other than Nokia has shipped more than one-fifth of the world's handsets since Motorola's Razr-heyday performance of 2006," wrote research firm Strategy Analytics. "The key to Samsung's growth has been an attractive portfolio of touch phones and an expanding retail presence across multiple regions."

Samsung has about 20.8% of the cell phone market, and it plans to focus on smartphones and entry-level devices over the next few quarters. The company's entry-level phones could sell well in emerging markets such as China and India, and high-end handsets as the Android-powered could help boost the division's profit margins.

The company's television unit also saw an increase in shipments and profit margins. Samsung said its TV shipments rose 24% from the same quarter last year, and it had a 16.9% profit margin. The company's liquid crystal display division also reported a 15.3% profit margin, up from 7.9% last year.


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