Samsung Electronics has announced revenues of KRW41.27 trillion (US$37 billion) on a consolidated basis for the third quarter ended September 30, 2011, a 3% increase on year. For the quarter, the company posted consolidated net income of KRW3.44 trillion, representing a 23% decrease on year. Consolidated operating profit for the quarter was KRW4.25 trillion.
In its earnings guidance disclosed on October 7, Samsung estimated third quarter consolidated revenues would reach approximately KRW41 trillion with an operating profit of KRW4.2 trillion.
Highlighting the quarterly performance, the telecommunications businesses recorded all-time high quarterly sales of KRW14.90 trillion, up 37% from the previous year, with growth mainly driven by strong sales of Samsung's Galaxy smartphones, the company said. Operating profit for the businesses also hit a record KRW2.52 trillion.
The semiconductor unit also saw sales hit KRW9.48 trillion during the June-September period, after posting KRW9.16 trillion in the second quarter. Increased demand for NAND flash chips used in mobile devices and enhanced revenue in the system LSI business, which creates mobile application processors and CMOS image sensors, supported overall profitability.
"Despite the difficult business environment due to the economic slowdown in developed markets, Samsung achieved a solid performance and recovered its double-digit operating profit margin in the quarter, driven by strong sales of our smartphones," said Robert Yi, vice president and head of Investor Relations.
Yi said Samsung's efforts to achieve balanced earnings across its component and sets businesses were beginning to materialize. "In anticipation of explosive growth in the mobile market, we have been focusing on fostering growth of certain component businesses, such as mobile DRAM, application processors, NAND and OLED panels. These industry-leading technologies, combined with our design and software capabilities, have enhanced the competitiveness of our set products," Yi said.
Looking ahead into the fourth quarter - when industry demand is traditionally at its peak - Samsung expects sales of mobile devices to remain strong and flat panel TV shipments to increase. However, Yi cautioned that due to lingering global economic uncertainties, "We cannot rule out the possibility of demand growth slowing compared to previous years."
Capital expenditure in the third quarter amounted to KRW4.9 trillion, bringing year-to-date total investments to around KRW16 trillion. Samsung will announce capex plans for fiscal year 2012 in the fourth quarter earnings report.
On the non-operating side, the rapid depreciation of the Korean won against the US dollar in September resulted in foreign exchange-related losses of around KRW420 billion due to translation of foreign currency-denominated assets and liabilities. However, Samsung expects to recover the translation loss in the fourth quarter, considering the current strengthening of the won against the greenback.