Samsung posts record operating profit of $7.4 billion in Q3, will set aside a billion to pay Apple

Samsung posts record operating profit of $7.4 billion in Q3, will set aside a billion to pay Apple
Samsung posted an outstanding Q3 report, recording his highest operating profit so far of $7.4 billion, a 91% increase year-on-year. For comparison, Apple's number was $8.2 billion, and the two companies have never been that close.

Of course, the last quarter of Apple's fiscal year is not its strongest one, as usually a new iPhone appears at the end of it, and Samsung releases its flagship a few months prior, but it is still a remarkable achievement on Samsung's part.

The Koreans sold 20 million Galaxy S III units alone, against 26.9 iPhones of all types for Apple. Overall IDC estimates are that Samsung has sold 56.3 million smartphones in the quarter, widening the lead before Apple's 15%, with 31.3% of the global smartphone market, while Nokia has fallen out of the top 5.

The profits from the telecom division alone, which houses its phone and tablet sales, were $5.12 billion, and represent 69% of the company's take-home pay, that's how important it mobile business is. If you spread the profit margin across the division, however, it is close to 19%, next to Apple's 40%+ margins, which is where the difference in profits comes from, despite double the units sold.

The company said it will set aside $1 billion if it loses the appeal in the US lawsuit against Apple this quarter, to pay the damages that the patent infringement jury decided it is liable for. "The amount of provisioning will be fixed according to U.S. court ruling, and the costs will be set aside this quarter only if there's a ruling within the current quarter," said Robert Yi, head of Samsung investor relations, on a conference call with analysts. With north of $7 billion made last quarter alone, we are not very worried this will rock its boat.

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