Samsung posts record $7.3 billion quarterly profit

Samsung logoSamsung has offered up its official financial numbers for its latest quarter and has posted record quarterly profit. Samsung posted a profit of $7.3 billion, which is nearly twice the figure from the same quarter of last year. Samsung says that strong sales of high-end TVs and its Galaxy smartphones were the key drivers for the record profits.

While Samsung Electronics is riding high this quarter, most expect the next quarter to be significantly more challenging. Samsung is believed to have spent about $2.7 billion on marketing in the quarter spanning July to September alone during the London Olympic Games and to promote the new Galaxy smartphone. The estimate on marketing expenses comes from Credit Suisse.

Other reasons Samsung may see a significant decline in profitability in the next quarter have to do with higher performance related payouts to many Samsung employees thanks to the record profits experience so far this year. Samsung also has to consider the $1 billion in damages it owes Apple for patent infringements if it's unable to overturn the ruling.

Most analysts expect earnings to continue to climb until Q2 2013 with a decline in computer sales and a weakening global economy that will reduce the demand for electronics. Analysts are also pointing out that a misstep in the smartphone market could prove disastrous for Samsung since much of its profits rely on smartphone sales.

"The biggest risk for Samsung is competitive product line-ups from its rivals such as the iPhone 5," said Byun Han-joon, an analyst at KB Investment & Securities.

Samsung's full quarterly results are due by October 26.

Source: DailyTech

Tags: report, Samsung

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