Samsung Electronics Co, the world's biggest memory-chip maker, said third-quarter profit surged fourfold, aided by sales of semiconductors and mobile phones with higher margins than most competitors.
Net income rose to 1.73 trillion won (US$1.4 billion) from 420 billion won a year ago. Operating margins, derived by dividing sales by operating profit, were 28.5 percent for chips and 26.8 percent for telecommunications.
Nokia Oyj, the largest cell-phone maker, posted an operating margin of 21.8 in its third quarter.
Samsung executives say the company is profitable because it outspends rivals on research and new plants, dominating the market for high-margin chips that rivals can't produce in large quantities.
It introduced a new mobile-phone model every month last year in a market where staying ahead of rivals is crucial to sales.
"I am impressed with the strong performances by the chip and mobile-phone units," said Lee Young Seog, whose Samsung Electronics shares account for about 15 percent of the 500 billion won he manages at Dongwon Investment Trust Management Co in Seoul.
The company, also the world's third-largest maker of mobile phones, sold 11.7 million handsets in the third quarter.
Its average selling price of phones in Korea rose 4 percent in the third quarter to 381,000 won and 6 percent to US$188 per phone for its exports.
The company maintained its worldwide cell-phone market forecast of 415 million units this year and said that about 120 million will be sold in the fourth quarter.
Nokia expects global sales of 400 million phones this year while second-largest maker Motorola Inc forecasts 390 million.
Samsung has been trying to expand gains in the mobile-phone market by focusing on models that offer functions not available in standard phones.
"Nobody expected our handset section to do quite so well," said Chu Woo Sik, Samsung's head of investor relations. "At this rate we will sell more than 41 million this year."
Semiconductor sales may improve toward the end of the year as PC sales rise during the holiday period, it said.
The company, which is the largest maker of DRAM chips, forecast PC sales will grow 20 percent in the fourth quarter.
Samsung's liquid-crystal display division, the world's largest maker of flat panel screens for computers, suffered a 25 percent decline in sales in the third quarter as the average selling price dropped 20 percent.
Demand will return in the first half of next year because the price decline makes the screens more attractive, said Cho Yeong Dok, an executive at the company's flat-screen division.
The decline in LCD prices will slow to 10 percent in the fourth quarter, he predicted.
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