Samsung grows Q3 profit, but misses forecast

Samsung Electronics has reported a net profit of 5.46 trillion won ($4.8 billion) for Q3, up 29.4 percent from the 4.22 trillion won ($3.7 billion) reported the same quarter a year ago, but down 5 percent quarter on quarter from Q2's 5.75 trillion won ($4.9 billion).

Despite the rise in profit, Samsung missed its forecast profit, however; Samsung had previously predicted net profit of 6 trillion won ($5.3 billion) on revenues of 51 trillion won ($3.9 trillion).

Samsung's Q3 earning report [PDF], released on Thursday morning, signalled growth in sales across most segments: Its IT and Mobile (IM) division increased by 8.3 percent for the year, from the 24.58 trillion won reported a year ago to 26.61 trillion won this year; and its Device Solutions (DS) division, which includes its semiconductor and display panel businesses, grew by 24.7 percent, from 16.29 trillion won in Q3 2014 to 20.31 trillion won in Q3 2015. Operating profit also increased across all segments.

Its Consumer Electronics (CE) business fell by just 0.1 percent year on year, from 11.6 trillion won in Q3 2014 to 11.59 trillion won in Q3 2015.

The South Korean tech giant attributed its overall profit increase to strong shipment growth in its smartphones, including the S6 Edge+, the Note 5, the A8, and the J5; LTE network expansions worldwide; increased demand in memory; improving popularity of mid- to low-end display panels; growth in shipments of TVs, particularly in North America and Europe; and demand for digital appliances in North America. Tablet sales remained flat.

Samsung reported total assets of 246.6 trillion won for the quarter, up 6 percent from last year's 231.8 trillion won for the same quarter. Liabilities also increased, however, from 231.7 trillion won to 246.6 trillion won.

Samsung's results in July instead signalled an 8 percent year-on-year drop in net profit, from 6.25 trillion won ($5.4 billion) down to 5.75 trillion won ($4.9 billion).

Its Q2 results [PDF] revealed total sales for the second quarter of 2015 of 48.54 trillion won -- down by 7.3 percent from the 52.35 trillion won reported in the same period last year.

The results showed declines in both IM and CE, with CE sales falling by 13.9 percent year on year to 11.2 trillion won, and IM sales falling by 8.3 percent to 26.06 trillion won. Its DS division rose by 10.1 percent, from 16.23 trillion won to 17.87 trillion won.

The company's sales had been steadily declining off the back of increased smartphone competition in both the high-end segment, largely from Apple's devices, and the low-end market, from inexpensive, feature-rich products emerging in China.

In December last year, it was revealed that Chinese smartphone manufacturers had surpassed their counterparts in South Korea, with Huawei, Xiaomi, Lenovo, ZTE, Oppo, Coolpad, TCL, Vivo, and Gionee recording a combined 31.3 percent of global market share in 2014, while Samsung and LG reported a total global market share of 30.1 percent.

"The Free Trade Agreement between South Korea and China is the best way for South Korea to boost up its core industries, which are now in crisis. Securing new technology and finding new businesses are essential for South Korea to beat China," said Yoo Hwan-ik, assistant secretary general of the Federation of Korean Industries' (FKI) Industrial Research division, at the time.

Huawei on Wednesday revealed its own results for the quarter, with its Consumer Business Group reporting total shipments of 27.4 million smartphones for the three months to September 30, a jump of 63 percent year on year.

"This quarter's results clearly showcase the continued success of our growth strategy," Richard Yu, CEO of Huawei Consumer, said in a statement.

"We are especially proud of the stellar growth we've seen outside of China and the increased demand for our mid- to high-end devices. At this rate, we are confident in our ability to reach our smartphone shipment target of 100 million units by year's end."

The Chinese manufacturing giant was forecast in July to ship 100 million smartphones by the end of 2015, and has been edging closer to that each quarter.

Xiaomi shipped 18.5 million smartphones over the same quarter, so far shipping 53.2 million handsets for the year as of September 30.

Samsung's main rival Apple on Tuesday announced its results for the quarter, reporting revenues of $55 billion for the quarter, up 22 percent year on year, and net income of $11.1 billion, or $1.96 per share. Wall Street was expecting revenues of $51.1 billion.

For the full year, Apple reported revenues of $233.7 billion.

Apple also revealed that it had sold 48.02 million iPhones, an increase of 18.4 percent from the 39.2 million unit sales during the same quarter a year ago. iPad sales were down from 12.3 million to 9.88 million, while sales of its Macs were up marginally from 5.5 million to 5.7 million this quarter.

Services, including iTunes and Apple Pay, accounted for $5.08 billion, an increase of 10 percent from the previous quarter. The company's other products, including its Apple Watch, were up 61 percent on the previous quarter, to $3.04 billion.