Samsung Profit Surges on Sales of Chips, Handsets
quote.bloomberg.com
By Ian King
Seoul, Oct. 18 (Bloomberg) -- Samsung Electronics Co., the world's biggest memory-chip maker, said third-quarter profit surged fourfold, aided by sales of semiconductors and mobile phones with higher margins than most competitors.
Net income rose to 1.73 trillion won ($1.4 billion) from 420 billion won a year ago. Operating margins, derived by dividing sales by operating profit, were 28.5 percent for chips and 26.8 percent for telecommunications. Nokia Oyj, the largest cell-phone maker, had a third-quarter operating margin of 21.8 percent.
Samsung executives say the company is profitable because it outspends rivals on research and new plants, dominating the market for high-margin chips that rivals can't produce in large quantities. It introduced a new mobile-phone model every month last year in a market where staying ahead of rivals is crucial to sales.
``I am impressed with the strong performances by the chip and mobile-phone units,'' said Lee Young Seog, whose Samsung Electronics shares account for about 15 percent of the 500 billion won he manages at Dongwon Investment Trust Management Co. in Seoul.
Samsung Electronics shares rose 6.2 percent to 326,500 won, their largest one-day gain since July 12. The stock is trading at its highest since Sept. 23. |
