Galaxy sales boost Samsung's profits

Posted by Emma Woollacott

Samsung has reported a quarterly profit of $7.3 billion - nearly double the figure for the same period last year, and well above analysts' expectations - thanks to strong sales of high end televisions and Galaxy phones.

However, it's warned that the good times may not last, because of increasing competition from the iPhone, along with slowing sales of chips and screens to Apple and other expenses.

In the fourth quarter, for example, the company's expected to have to make a number of one-off staff performance payments, as well as up to $1 billion in legal expenses relating to its ongoing litigation with Apple - depending on whether or not it manages to get a recent court decision overturned.

 It will also need to pump serious sums into marketing as it aims to fight off competition from the iPhone 5.
 
The company has phone handset sales to thank for most of this quarter's improvement in profits. It shipped more than 20 million units of the Galaxy S III in the first hundred days after its May launch, and as many as 57 million smartphones overall during the quarter. It now holds more than a third of the global smartphone market - almost double Apple's share.

But Samsung's consumer electronics division is also doing well, as it launches new products such as 3D televisions and OLED and internet-enabled models.

And despite the pressures of the next three months, most analysts expect Samsung to report another healthy quarter, boosted by the recent launch of the Galaxy Note II, and higher European revenues as a result of a stronger Euro.

Today's figures are an earnings guidance only, with the company's full earnings to be reported later this month.