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Samsung Electronics has reported a record quarterly profit of A$7.16 billion, nearly double the figure for the same quarter last year, as strong sales of high-end televisions and Galaxy smartphones more than offset reduced orders for chips and screens from Apple, its main rival and leading customer.However most analysts expect the recent run of four record quarters to end in December, as the South Korean group increases its marketing to counter the new Apple iPhone 5 and other products in a crowded smartphone market.
Finance group Credit Suisse estimated that Samsung might have spent about $2.7 billion on marketing from July to September during the Olympic Games in London and on Galaxy promotions.
The expected record profit of 28 trillion won (A$24 billion) would mean higher payouts for performance to many of Samsung’s 206,000 staff members early next year. And Samsung may have to set money aside this quarter if it fails to overturn an appeal of a US court verdict that awarded more than $1 billion in damages to Apple on August 24 for patent infringements.
The Wall Street Journal said that Samsung’s operating profit has been climbing since the first quarter of 2011, in part because rising sales of smartphones, such as its flagship Galaxy phones, helped it leapfrog Apple as the world’s biggest smartphone maker. The strong sales of the high-end smartphone devices, including Samsung’s latest product, the Galaxy S III, have helped lift the overall sales price of the company’s handset products, analysts say.
But Samsung shares, which peaked on May 2 at 1.41 million won, have been under pressure because of lingering uncertainties surrounding the legal battle with Apple.
The Korean company was dealt a blow in late August when a U.S. federal jury decided Samsung infringed some of Apple’s design and software patents and fined it more than $1 billion. Samsung has appealed the ruling.
And risks remain that operating profit at the company’s mobile business, which likely accounted for nearly 70% of total operating profit during the July-September period, may slow inthe fourth quarter. This is largely because of increased marketing costs caused by intensifying market rivalry, especially after Apple released its new iPhone 5 device in September, and possible provisions following Samsung’s defeat in the U.S. courts.
