SEOUL – South Korea’s Samsung Electronics said on Friday net profit soared 41.6 per cent to a record 7.15 trillion won (US$6.4 billion) in the first quarter of 2013, driven by strong smartphone sales.
The profit figure was up from 5.05 trillion won in the first quarter of 2012 and beat the previous record of 7.04 trillion won set in the fourth quarter of last year. Operating profit rose 54 per cent from a year ago to 8.8 trillion won, while sales were up 16.8 per cent at 52.9 trillion won.
Analysts estimate Samsung shipped approximately 70 million smartphones in the three months to March. The company does not release details on the number of phones it sells in its earnings reports.
The earnings figures were released on the same day as the new version of Samsung’s flagship smartphone, the Galaxy S4, went on sale in South Korea ahead of a planned global roll-out.
In a statement Samsung said “sound sales” of the popular Galaxy S3 smartphone had aided profit margins, but cautioned that second quarter global demand was “forecast to dampen”.
“We may experience stiffer competition in the mobile business due to expansion of the mid – to low-end smartphone market,” said Senior Vice President Robert Yi.
Of the total 8.8 trillion won operating profit, the IT and Mobile Communications division accounted for 6.51 trillion won, with sales of 32.82 trillion won in the first quarter – the bulk of it from the mobile business.
Shares of Samsung Electronics were 0.33 per cent down in early trading from Thursday’s close. The share price has gained 14 per cent in the past year. Profit at Samsung’s semiconductor division in the first quarter was put at 1.07 trillion won, compared with 700 billion won last year, on sales of 8.58 trillion won.
The display division, which makes flat panels for TVs and mobile devices, posted a profit of 770 billion won, up from 230 billion won a year earlier, but down on the two previous quarters.
“The Display Panel segment faced a challenging quarter due to seasonally soft demand from set makers,” the company said.
“However the introduction of new devices and increased shipments of smartphone display panels, prevented steeper losses,” it added.
The new Galaxy S4 smartphone that went on sale Friday was unveiled last month at a glitzy event at New York’s Radio City Music Hall – reflecting Samsung’s desire to expand its presence in the high-end US market against arch rival Apple and its iconic iPhone.
Armed with eye motion control technology that will pause a video when the user looks away, the S4 comes with a faster chip and is thinner and lighter than the previous S3 model.
It features a high-definition, 12.7cm screen, enhanced picture-taking capabilities and the capacity to translate to and from nine languages. It also recognises touch by users wearing gloves.
Samsung said on Thursday that unexpectedly high demand for the new model was behind shipping issues that resulted in the postponement of its scheduled sales release in the US market this weekend.
After years of following and refining the iPhone’s pioneering innovations – a strategy that resulted in bitter patent battles – Samsung has dethroned Apple to become the top smartphone maker on the planet.
The world’s largest technology firm by value has boasted stellar sales growth, setting new records for operating profit in every single quarter of 2012. Apple by contrast reported on Tuesday that its quarterly profit had dipped for the first time in nearly a decade.
But Apple’s iPhone commands a profit margin double that of Samsung’s smartphone stable which holds a much wider range of devices for both low – and high-end buyers.AFP