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Tuesday, Oct 29th

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Samsung beats market expectations in Q3 - gains operating profit

Samsung beats market expectations in Q3

Samsung Electronics, the multinational tech giant, reported gain of operating profit by 85% in the 3rd quarter. The quarterly profit sums up to around 8.1 trillion Korean won which is exactly double of the figures recorded last year. Operating profits of Samsung were noticed to be climbing since first quarter of 2011 due to fair sale of Samsung's smartphones and this is the main reason behind such a drastic profit gain of the company, resulting into up-going shares as well. In spite of the deep conflicts between Apple and Samsung, the company gained profits giving a tough competition to it biggest smartphone rival.

Apple litigated Samsung into US court for patent infringement issue, forcing it to pay a bill of around $1 billion for the same. The conflicts mainly revolved around the Samsung smartphones' global sales and this is the fact which helped Samsung gain revenue as well as profits. Despite the issue, Samsung's operating profit raised to more than 85% which probably is a sign of tough competition and further conflicts between the two companies. The profits of the company also had lively effects on its share market as well. The profits had a positive impression on the revenue and shares of the company, pushing the shares by around 1.7% making them to 1.4 trillion won. This was the highest value of Samsung shares in past 5 months.

According to the statistics, profits for third quarter are around $47 billion which were near about $38 billion, year before. Similarly, double increase in the operating profits was noticed from $3.8 billion in 2011 to $7.5 billion at present. According to the analysts, though there are good progressions seen in the revenues and profits of the company, this would not be the case through 4th quarter of the year. Reason behind it is, although Samsung gained profit in smartphone sales, the semiconductor division of the company was on the downside giving a comparatively weak performance in the 4th quarter. One of the other reasons for this can be increased marketing costs as a result of fierce market rivalry like launch of Apple's iPhone 5 and so on. On the other hand, due to recent launch of Samsung Note 2 tablet, it won't affect Samsung's market to a large extent and considering the European market, it would be definitely an agile scenario as the Euro value climbing up.

The entire profit reports of the company have not been featured and would be released after 26th of October. Predictions of the Q4 market of Samsung and the highlights of the Q3 profits could be reviewed in detail, once the reports are released. Though the company gained profit in Q3, analysts and economist cannot anticipate about the market condition of 4th quarter. Summing up the entire profits gained, current and forthcoming market conditions and the analysts' predictions, probabilities are that, fall in the profits of Samsung in the next quarter could be experienced.