Samsung Electronics Co Ltd's quarterly operating profit surged 26 percent to a new record, matching estimates and powered by a strong recovery in its memory chip business as smartphone sales growth eases sharply.
The smartphone leader has posted a record profit in six of the past seven quarters but may find it hard to extend its winning streak without a new hit gadget, after less-than-spectacular launches of its Galaxy Gear smartwatch and Galaxy Round curved phone in recent months.
Samsung forecast on Friday that strength in its bread-and-butter chip business would continue in the current quarter, while growth in smartphones would slow due to intensifying competition during the year-end holiday season.
Samsung has done well, having rapidly caught up with Apple in the smartphone market. But I'm concerned whether Samsung would be able to do better," said Kim Sung-soo, a fund manager at LS Asset Management.
he mobile division, Samsung's biggest earnings generator, reported a record 6.7 trillion won profit as a greater variety of cheaper Galaxy smartphones boosted shipment volumes and helped counter weakening growth in the lucrative high-end segment.
Samsung, which competes with Apple Inc in the mobile market, faces margin pressure in the current quarter as it splashes out on marketing its high-end Galaxy S4 and Note 3 smartphones during the year-end holiday season.
Shares in Samsung, worth $222 billion (137.1 billion pounds), rose 10 percent over the past three months, outperforming a 7 percent gain in the wider market.
Source: Reuters
