Samsung’s operating profit has declined for seven straight quarters but that changes with Samsung announcing its earnings for the third quarter today, as expected the company has achieved operating profit growth, its first since the Galaxy S4. Samsung’s consolidated revenue for the third quarter came in at 51.68 trillion won ($45.6 billion), that’s net profit and sales combined, posting 7.49 trillion won ($6.42 billion) in operating profit. These figures show a significant improvement over Q3 2014 when Samsung posted a disappointing operating profit of 4.22 trillion won ($3.7 billion) on consolidated revenue of 47.45 trillion won ($41.7 billion).
Overall the company’s revenue has increased by approximately 6% on a quarter-on-quarter basis with much of the improvement being driven by its semiconductor and display panel business. A 500 billion won ($440 million) improvement in operating profits has also been accounted to a favorable exchange rate brought on by a weaker Korean Won against major currencies. Samsung’s mobile business hasn’t significantly contributed to this improvement as it only posted 2.4 trillion won ($2.1 billion) in operating profit for the quarter. That’s a robust growth over Q3 2014′s profit of 1.75 trillion won ($1.54 billion) but a decline from Q2 2015′s 2.76 trillion won ($2.4 billion). The company does say that it saw a “significant increase” in sales of smartphones in this quarter as opposed to the second quarter with increased shipments of premium handsets like the Galaxy Note 5, Galaxy S6 edge+ as well as the Galaxy A and the Galaxy J series. It does point out that price adjustment of the Galaxy S6 and the Galaxy S6 edge and increased shipments of mid-to-low end smartphones caused revenues to increase slightly while operating profit declined quarter-over-quarter.
Samsung says that the markets are responding positively to the large screen smartphones released this quarter and it expects their shipments to pick up further. The company expects smartphone sales to improve in the fourth quarter due to higher market demand as the year-end holiday season rolls in but acknowledges that the competition is expected to get stronger. Samsung will focus on maintaining a profit level similar to the previous quarter for smartphones and it will expand product sales for each price segment that were introduced in the third quarter. A proper earnings guidance will come later but Samsung cautions investors that it expects earnings to decline in the fourth quarter primarily due to unfavorable foreign exchange rates.
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