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Earnings: Samsung Profit Plunges 44 Percent; Telecommunications Unit Misses Forecasts

imageSamsung’s third quarter net income plunged 44 percent to 1.22 trillion won ($863 million), the company reported today, the lowest since the second quarter of 2003. As Bloomberg reports, oversupply drove down prices of semiconductors and displays, hitting profits. Still, net income met analyst expectations, while revenue and operating profit beat forecasts. Earnings from its telecommunications unit, which includes both handsets and network infrastructure fell 15 percent to about 500 billion won ($350.2 million), missing expectations by 10 percent.

Earnings Highlights:

— Handset sales up: Sales of handsets reached 6.09 trillion won ($4.26 billion), up 27 percent year on year, and 13 percent quarter on quarter. Samsung, the second biggest handset maker, shipped 51.8 million units, up 22 percent from the same period last year, and up 13 percent from Q2. This is the first time quarterly shipments exceeded 50 million.

— Average selling price (ASP) drops:ASP was down to $135 from $143, a drop of 5.6 percent sequentially. Samsung blamed a drop in domestic sales of higher priced phones for the drop. It’s smaller Korean rival LG (SEO: 066570) also noted that lower operator subsidies had hurt high end phone sales in the domestic market.

— Market share up: Samsung puts its global market share at 16 percent, a slight climb from 15.4 percent in the second quarter. It reported an operating marging of 10 percent, despite what decreased domestic sales and an increase in marketing costs.

— Forecast: Samsung said it expected to achieve its annual sales target of 200 million units.

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