Samsung posted its third-quarter earnings today, and just as previously predicted, — the company is back to operating profit growth after over seven quarters of decline. Samsung says it made $6.42 billion in operating profit and increase compared to the Q3 2014 where it made $3.6 billion. The Korean company said revenue was driven mainly by its semiconductor and display panel segments. It also saw “a significant” rise in sales of the Galaxy Note 5, Galaxy S6 Edge+, Galaxy A, and Galaxy J phones. But, while it shipped more mid-tier smartphones, the price cut of its flagship Galaxy S6 and S6+ contributed to a decrease in year-on-year profits in the mobile segment. Both net profit and sales rose also increased from the same period last year, rising from $3.7 billion on sales of $41.7 billion in 2014’s Q3, to $4.8 billion on sales of $45.6 billion.
Samsung’s mobile division was less helpful, posting $2.1 billion in operating profit for the quarter — a rise from last year’s Q3 profit of $1.54 billion, but a dip from $2.4 billion in Q2. Samsung’s decision to push the Note 5 out in August — a month earlier than normal — doesn’t seem to have impacted the mobile division’s profits greatly.
Predicts a dip in smartphone growth rate
The company says it’s expecting a stronger fourth quarter than third for smartphones, but specifies that competition — between its products, Apple’s iPhones, and newer, cheaper challengers from Chinese companies — is getting stiffer. Next year will be even tougher for smartphones, Samsung says, as it expects the growth rate for the market to slow continuously. In response, the company says it will push its new payment service, Samsung Pay, and refocus on its wearables to “respond to market needs.”
While an increase in operating profit and a year-on-year net profit increase points to a more positive quarter for the Korean company after two years of declining profits, Samsung has warned that it expects earnings to decline in Q4, driven downwards in part by unfavorable foreign exchange rates.
