Samsung Galaxy Phones Help Company Beat Quarterly Profit Estimates
Despite losing a lawsuit to Apple, strong sales of the Samsung Galaxy S III have the world’s largest handset manufacturer poised to reap impressive Q3 profits.Mobile handset manufacturer Samsung surprised analysts by posting third-quarter guidance indicating a higher quarterly profit for the three-month period ending in September, with operating profits up 91 percent to 8.10 trillion won ($7.3 billion). An aggregate of 32 analysts’ estimates compiled by Bloomberg predicted the company’s operating profit would be 7.58 trillion won. Analysts said the strong quarterly showing was likely helped by robust sales of the Samsung Galaxy S III smartphone, widely seen as the strongest competitor to Apple’s iPhone 5. By September, Samsung had sold 20 million Galaxy S III handsets just 100 days after its launch. However, the popularity of Samsung's smartphones masked areas where the company has been experiencing difficulty, most notably its computer memory chips. The company’s biggest customer, Apple has also decided to replace Samsung components in its hugely popular iPhone 5 in two notable areas, including NAND flash; Elpida has replaced Samsung as the supplier of the synchronous dynamic RAM (SDRAM) in an iPhone 5 reviewed by IHS. “Sales have been very, very good around the world despite the best efforts of Apple to restrain them,” Mark Newman, a Hong Kong-based senior analyst at Sanford C. Bernstein told Bloomberg Television.
The focus is now likely to turn to the discussion of whether or not Samsung will be able to repeat the feat for the fourth quarter, as the company, along with all other smartphone and tablet manufacturers, strives to make the most of the upcoming, highly lucrative holiday shopping season. Other factors that may affect fourth-quarter performance include potential payouts to Apple following a patent infringement lawsuit.