Samsung posts record $7.3-billion quarterly profit

Rate of income increase expected to slow as company will be forced to spend more

Samsung Electronics

SEOUL — reported a record quarterly profit of $7.3 billion, nearly double last year’s figure, as strong sales of high-end TVs and Galaxy smartphones more than offset reduced orders for chips and screens from Apple Inc., its main rival and leading customer.

Most analysts, however, expect a run of four straight record quarters to end in De- cember as the South Korean group, the world’s leading maker of smartphones, TVs and memory chips, ramps up its marketing to counter Apple’s new iPhone and other products in a crowded $200-billion global smartphone market.

This year’s expected record profit of 28 trillion won ($25 billion) will also trigger higher performance related payouts to many of Samsung’s 206,000 staff early next year. And Samsung may have to set money aside this quarter if it fails in an appeal to overturn an Aug. 24 U.S. court verdict that awarded more than $1 billion in damages to Apple for patent infringements by Samsung.

“Fourth-quarter profit will be pressured by one-off expenses: performance payouts and some $1 billion in legal provisioning relating to the Apple litigation. Excluding those, core earnings will remain solid and a swing factor is how much Samsung spends on marketing,” said Lee Suntae, analyst at NH Investment & Securities.

Profit at Samsung’s mobile division is likely to have more than doubled in JulySeptember to about 5 trillion won — around two-thirds of total group profit — as smartphone shipments topped 58 million, including up to 20 million Galaxy S IIIs.

Before full quarterly results due by Oct. 26, Samsung estimated its July-September operating profit jumped 91 per cent to 8.1 trillion won from a year ago, beating an average forecast of 7.6 trillion won in a Reuters survey of 16 analysts. That would be more than a fifth higher than the previous record in AprilJune.