Samsung sets record-high profit on mobile momentum

Samsung Electronics sets record-high profit for 1Q on continued smartphone momentum

Associated Press

SEOUL, South Korea (AP) -- Samsung Electronics Co. said Friday its first-quarter net income jumped 42 percent over a year earlier to a record high thanks to robust smartphone sales even during a typically slow season for the electronics market.

The world's largest smartphone maker said its net income reached 7.2 trillion won ($6.5 billion) in the first three months of 2013, compared with 5 trillion won a year earlier.

The figure was a surprising 2 percent increase from the previous quarter. Analysts expected Samsung to report lower profit than the fourth quarter because demand typically slows.

But sales of Samsung's flagship smartphone, the Galaxy S III, and the oversized handset device called the Galaxy Note remained strong and shored up profit, Samsung said. It also spent less on marketing its mobile devices than it did in the previous quarter when competition heated up with rivals.

Sales rose 17 percent to 52.9 trillion won. Operating profit was up 54 percent to 8.8 trillion won, in line with its preliminary results released earlier this month.

Samsung successfully capitalized on global demand for smartphones with a wide range of mobile devices that come in a variety of screen sizes and a diverse price range, outpacing rivals including Apple Inc. and Nokia Corp.

Samsung's IT and Mobile Communications division that makes smartphones, tablets, PCs and cameras reported 6.51 trillion won in operating income for the first quarter, a 56 percent growth from the previous year and its highest since Samsung reorganized the division to merge PC and handset departments.

The company's outperformance in the mobile market helped offset sluggish demand in the TV market and still weak recovery in display panel sales.

Analysts expect Samsung to report another record-high profit during the April-June quarter as the Galaxy S4, the latest iteration of the Galaxy S smartphone, goes on sales worldwide, months before Apple introduces a new version of the iPhone. The Galaxy S4 was launched in South Korea earlier Friday before its release in the U.S. starting Saturday.

Samsung said initial orders for the Galaxy S4 were higher than expected, making it difficult to meet demand. Lee Don-Joo, head of sales and marketing at Samsung's mobile division, said sales of the S4 will be higher than its predecessor.

Samsung, based in Suwon, South Korea, is also the largest maker of memory chips, televisions, mobile handsets and liquid crystal display panels.

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