Samsung 3Q13 operating profits rise 26% to new record
Jessie Shen, DIGITIMES, Taipei [Friday 25 October 2013]
Samsung Electronics saw its operating profits increase about 26% on year to more than KRW10 trillion (US$9 billion) in the third quarter of 2013, buoyed mainly by significant growth in profits generated from its semiconductor division.
Samsung has reported a record KRW10.16 trillion in operating profits for the third quarter of 2013, with consolidated revenues rising 13.2% on year to KRW59.08 billion. Net profits for the quarter came to KRW8.24 trillion, up 25.6% compared to the same period of 2012.
Including memory and system LSI, Samsung's semiconductor division posted net profits of KRW2.06 trillion in the third quarter of 2013. Compared to the profits of KRW1.02 made in the third quarter of 2012, operating profits for third-quarter 2013 represent an about 102% jump.
"Earnings improved led by increased sales of high value-added/differentiated products while advancing migration to cutting-edge process," Samsung said in its available presentation materials.
Samsung disclosed it has expanded sales of DRAM for mobile devices, servers and games consoles while also stepping up the pace of its transition to 20nm-class manufacturing. As for NAND flash, the firm is set to migrate to 10nm-class production while expanding high value-added solution offerings.
Samsung's device solutions (DS) business consisting of its semiconductor and display panel (DP) units saw its operating profits increase by a smaller 39.2% on year to KRW3.09 trillion in the third quarter of 2013. Operating profits generated from its DP slid 16.2% from a year earlier to KRW0.98 trillion in the third quarter.
Panel prices fell due to rising inventory levels in the industry, coupled with weaker-than-expected demand despite the quarter being a traditional peak season, Samsung noted.
Samsung's IT & mobile communications (IM) division, which its mobile communications business belongs to, still accounted for the majority of the vendor's overall operating profits in the third quarter. The largest business unit generated operating profits of KRW6.7 trillion in the third quarter of 2013, up 19% from a year earlier.
The on-year increase in operating profits generated by Samsung's IM business appears to slow compared to growth of over 50% in the first and second quarters of 2013.
Samsung disclosed that third-quarter shipments of its high-end smartphones stayed flat on quarter, while those of mass-market devices increased. Meanwhile, shipments of its tablets increased sharply on quarter, the firm said.
Samsung expects to benefit from the smartphone and tablet market growth in the fourth quarter of 2013, but warned that competition in the market will be intensified further. As for the memory market, the firm commented that supply will be tight due to solid demand for non-PC applications such as mobile devices and servers.
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