(MENAFN- Khaleej Times) Samsung Electronics, the world's biggest maker of TVs and mobile phones, reported record profit that beat analysts' estimates and forecast intensifying competition as the global economy slows.
Net income in the three months ended September 30 rose 91 per cent to 6.56 trillion won ($6 billion), the Suwon, South Korea-based company said in a statement on Friday. That compares with the 6.25 trillion-won average of 27 analyst estimates compiled by Bloomberg.
Operating profit from telecommunications more than doubled as Samsung's Galaxy devices widened their lead over Apple's iPhone. Samsung shares dropped amid concern growth in smartphone demand may have peaked after Apple reported earnings that missed estimates and Microsoft released its Surface tablet, escalating competition for mobile devices.
"The problem is the worry about the smartphone market peaking," said Lee Jin Woo, a fund manager at Seoul-based KTB Asset Management. "The question is whether tablets can offset the peak in the smartphone market, but it might take some time. Apple's results refueled these concerns."
Samsung fell 2.7 per cent, the most in two weeks, to 1,287,000 won at the close of Seoul trading, paring gains this year to 22 per cent. South Korea's benchmark Kospi index declined 1.7 per cent. Competition probably will increase in the fourth quarter amid a global economic slowdown, Samsung said in a statement on Friday.
The company will focus on high-value products to maintain its momentum and will try to boost sales of tablet computers with more pen-equipped models and cheaper devices, Samsung said.
"We plan to make tablets our new growth engine," the company said in the statement.
Samsung's operating profit surged 91 per cent to 8.12 trillion won from 4.25 trillion won the year before. Sales rose to 52.18 trillion won, equivalent to 19 per cent of South Korea's gross domestic product, from 41.27 trillion won a year earlier.
More than two-thirds of the earnings were generated by the telecommunications business, where operating profit jumped to 5.63 trillion won from 2.42 trillion won, the company said in the statement.
That compared with the 5.42 trillion-won median of four analyst estimates compiled by Bloomberg News. Sales at the unit rose to 29.92 trillion won from 17.94 trillion won.
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