Samsung 3Q profit triples to record as sales jump

[October 30, 2009]  SEOUL, South Korea (AP) -- Samsung Electronics Co. said third-quarter net profit tripled to a record amid higher prices for computer memory chips and increased sales of consumer products from flat screen televisions to mobile phones.

South Korea's biggest corporation and a world leader in consumer electronics earned 3.72 trillion won ($3.14 billion) in the three months ended Sept. 30, it said Friday. Samsung posted net profit of 1.22 trillion won a year earlier.

The quarterly net profit was an all-time high for the company, said spokesman Reuben Staines. The previous record was 3.14 trillion won in the first quarter of 2004.

Sales at the Suwon, South Korea-based company rose 29 percent to 24.86 trillion won during the quarter from 19.3 trillion won a year earlier. That was also a record, Staines said.

Samsung is a major force in global electronics, making not only consumer products but also key components such as memory chips and panels.

The company is the world's biggest seller of flat screen TVs, computer memory chips and liquid crystal displays. It ranks No. 2 behind Finland's Nokia Corp. in mobile phones.

Samsung shares rose as much as 3.1 percent during trading, but pared gains and ended the session 0.7 percent higher at 723,000 won. The company released earnings results about 30 minutes after the stock market opened. The stock price has risen 60 percent this year.

The company said in a statement it benefited from higher prices for computer memory chips as well as increased demand. Sales of flat screen TVs increased 24 percent from the same quarter last year to 7.73 million.

It also sold 60.2 million mobile phone handsets in the third quarter, up 16 percent from last year and is gaining market share.

"We expect that when all results are in our market share should reach 20 percent for the first time," Robert Yi, a Samsung vice president, told analysts on a conference call.

The company has now recorded three straight quarters of net profit after suffering its first loss during the final three months of last year as the global economic slump hit prices and demand for mainstay products.

Looking ahead, Samsung forecast a "solid fourth quarter supported by seasonal demand for consumer electronics." Samsung said the "outlook is positive for further growth as the global economic recovery continues into 2010."

Yi said on the conference call that Samsung is "cautiously forecasting that our 2010 profitability may improve over that of 2009."

The record result comes amid strong third-quarter earnings from other major South Korean companies. Hyundai Motor Co. and affiliate Kia Motors Corp. both announced record net profit.

Samsung rival Hynix Semiconductor Inc. also recorded its first net profit in two years as prices for memory chips increased. LG Display Co., which competes with Samsung in LCDs, announced record quarterly sales and a 90 percent surge in net profit. LG Electronics Inc., another rival, said it recorded all-time high quarterly sales for flat screen TVs and mobile phones.

South Korea's economy is quickly rebounding from the depths of the global slump. Asia's fourth-largest economy accelerated to growth of 2.9 percent in the third quarter, its best performance in more than seven years.

On a consolidated basis, which includes overseas subsidiaries, Samsung said sales rose 18.5 percent to 35.87 trillion won. Operating profit nearly tripled to 4.23 trillion won. Samsung does not release a consolidated net profit figure. The results came close to estimates the company made in early October.

[Associated Press; By KELLY OLSEN]

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