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Thank god for Galaxy: smartphones sales buoyed Samsung’s Q3 results today, beating Apple’s 17.1m handset sales by around 10m. Total sales at the giant were up 3% to 41.7 trillion won – compared to 40.3 trillion won a year ago – although its TV and panel businesses were on the slump.
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| Hero of Q3, Galaxy S II |
Total net profit, however, dived 23% to 3.44 m won or US$3.11bn, which was forecast. Earnings margin before tax also dipped 1% to 18%.
This was on the back of weak demand for PCs and LCD TV panels in Q3 amid “muted seasonality” although shipments rose slightly, salesin all other divisions fell, apart from mobile telecoms unit.
Samsng’s mobile sales rose a whoping 39% to 14.42 trillion won. Operating margin on telecoms was also up 16.9% a 6.2 percent jump year on year.
However, handsets saved the day with growth of an impressive 44 percent in July-September period, with shipments gaining in all regions.
“Strong growth was mainly lead by smartphones with regional expansion of Samsung Galaxy S II,” Samsung said.
The solid growth across all segments was also down to enhanced “mass market” models like Galaxy Wave and Galaxy Y Pro Shipments also up in emerging markets China, South America and Southeast Asia.
The Galaxy S II flagship was the top selling smartphone here in August, Samsung Australia said recently.
Although the Galaxy makers did not disclose exact sales figures, it did say smartphone shipments were “high-20 percent” and analysts JP Morgan estimate the figure to be approximately 29 million units, marking a fourfold jump on 2010 figure.
Feature phone shipments were also up 10 percent quarter on quarter. On the tablet front, the newly released Galaxy Tab 10.1, currently banned here in Australia, and Tab 8.9 also saw a push in volume shipments.
It also expects Galaxy demand to soar further in Q4 with end of season promos and new product line-ups including the newly announced Galaxy Nexus Prime on Ice Cream Sandwich, Galaxy S II LTE and Galaxy Note, and is forecasting strong demand for tablets, in particular the Galaxy 7.7″ AMOLED screen in the run up to Christmas.
It is also looking to shove its smartphone domination further ahead with new mass market Galaxys as well as more tablets.
Samsung also said basic mobile sales were up 20 percent, which analysts believe places the figure at 89 million catching up with rival Nokia, the biggest global phone maker.
By comparision, Nokia sold 16.8 million smartphones in the July to September period and shipped 106.6 basic mobiles.
Operating profit for its telecom business which mobile accounts for over 90% of was 2.52 trillion won – a jump of 6.2% y-o-y.
This figure accounted for a whopping 59% of Samsung’s total operating profit figure, the highest ever.
LCD slumpy
However, Samsung’s LCD display business didn’t fare as well recording a loss – with sales diving 20% to 6.42 trillion won and overall demand for large panels down due to slowdown in developed markets, citing “LCD business difficulties.”
The panel maker shipped 179m units, a 12% rise compared to a year ago, although just a 1% lift compared to Q2 2011.
Demand for TVs was less than expected due to a similar slowdown in developed markets in spite of falling average selling prices (falling 7%), driven by inventory adjustment, which suggest the devices were hard to shift.
However, Samsung TV division did turn over a small profit of 240bn won, an improvement on previous losses in the division.
However, LED panels demand grew “continuously” Samsung said, and sales of 43 inch and 48 inch models also increased. PC and notebook panels also slumped amid weakening demand for computers .
Looking to Q4, panel growth is expected to remain static although Samsung expect demand to pick up year end and in Chinese New Year.
And LED is also predicted to be a shining category in the display business and expected to reach 50% penetation rate by next quarter jumping to a whopping 72% by 2012.
However, it predicts an improving LCD market with entry level 3D TV and LEDs, but overall forecast growth to be “limited” for Q4 due to the global economic slowdown.
Drooping demand for PC and notebook panels also hit display business growth although demand for tablets was “solid” Samsung said today and expects tablet demand to drive growth of its panel operations.
And it appears to be a dog-eat-dog PC world with tablets expected to “cannibilise” notebook sales, while notebooks look set to cannibilise PCs.
Samsung’s semiconductor division sales also fell 27% to 6.6 trillion won.
