Samsung Electronics Co., the world's top maker of computer memory chips and smartphones, said Friday its third-quarter earnings almost doubled from a year earlier as strong sales of its flagship smartphone Galaxy S3 continued to boost its profit margin.
Net profit reached 6.6 trillion won ($6 billion) in the July-September period, compared with 3.4 trillion won a year earlier, the company said in a regulatory filing.
Sales surged 26.4 percent on-year to an all-time high of 52.2 trillion won in the three-month period, while operating profit soared 91 percent to a record 8.1 trillion won, which was in line with Samsung's guidance released earlier this month.
"The business environment remained difficult with global economic uncertainties persisting amid the fiscal concerns in the U.S. and Europe. However, we continued to break our quarterly profit records," Robert Yi, senior vice president and head of Investor Relations at Samsung, said in a statement.
The stronger bottom line was largely attributed to solid sales of the company's flagship Galaxy S3 smartphone, which has sold more than 20 million units globally since its release in late May.
Galaxy S3 shipments are estimated at 18 million units for the third quarter, while smartphone shipments and overall mobile device shipments are projected to reach 59 million and 106 million units, respectively, according to an Oct. 2 report by IBK Securities Co. analyst Lee Seung-woo.
Operating profit at Samsung's IT & Mobile Communications business, which covers the company's handset business, came to 5.6 trillion won, accounting for nearly 70 percent of total operating profit.
Meanwhile, the company said its display panel business, which returned to profit from a year earlier, helped drive its record earnings.
Samsung's display business posted a 1.1 trillion won operating profit in the third quarter, a turnaround from a 90 billion won loss the previous year.
Increasing demand for OLED panels for smartphones as well as other high valued-added products, such as LED panels for TVs and LCD panels for tablets, softened feeble demand for laptop and monitor panels, according to the company.
The tech heavyweight, however, said weakening euro and emerging market currencies as well as a continued slump in the memory chip sector weighed on its profits.
Samsung's semiconductor segment saw its quarterly operating profit come to 1.2 trillion won, down from 1.6 trillion won a year earlier, as global uncertainties and an oversupply weakened demand for PC DRAM chips.
The company's consumer electronics division, which includes TV and home appliance sales, saw its operating profit reach 430 billion won, up 38 percent from a year earlier.
Samsung said a growing portion of high-end TV products helped offset slowing demand sparked by economic uncertainties.
Meanwhile, Samsung said its capital expenditure in the third quarter reached 4.5 trillion won, bringing its total capital spending in the first nine months of the year to 18.5 trillion won.
The figure accounts for 73 percent of the 25 trillion won it plans to spend on capital expenditure this year. Yi said the company does not expect any material changes to the initially planned amount.
Despite logging stellar results, the company voiced concerns that economic woes may heighten market competition in the fourth quarter.
"The economic growth may be weaker than expected due to macroeconomic uncertainties which could bring muted seasonal demand increase, which in turn, could cause market competition to increase further," Yi told investors in a conference call, pledging to step up marketing efforts and enhance the profitability of its product mix.
Yi said the company plans to increase mobile chip sales to offset delayed PC recovery as well as nurture tablet computers as a new growth engine to cement its leadership in the mobile device market.
Competition in the mobile device market, where Samsung holds over a 30 percent stake in the smartphone sector, has been heating up amid the emergence of low-end smartphone manufacturers and archrival Apple Inc.'s new phone and tablet releases.
Samsung has also been moving to expand its mobile device line-up by introducing the 5.5-inch Galaxy Note 2 gadget and the Galaxy Note 10.1 tablet.
Shares of Samsung were trading at 1,298,000 won on the Seoul bourse as of 11:21 a.m., down 1.82 percent from Thursday's close. The quarterly results were announced ahead of the stock market opening. (Yonhap)