South Korea's Samsung Electronics Co. booked a record net
profit for the third straight quarter thanks to brisk sales of semiconductors
and mobile phones.
Japanese rival Sony Corp. climbed back to the black as
consumers clamored for its PCs and the PlayStation 3 gaming console. Panasonic
Corp.'s net profit surged more than fivefold on strong demand for flat-panel
TVs and Blu-ray Disc recorders.
The results underscore how major Asian manufacturers have
benefited from a recovering global economy and government stimulus measures
that boosted consumer spending. But with that recovery now in doubt in key
overseas markets like the US, companies are preparing for a tougher fight for
customers and with each other. Rising currencies in Asia also cloud their
outlooks.
"We believe the operating environment will become
more severe," said Sony's Chief Financial Officer Masaru Kato at a
briefing for analysts. "We are being very cautious regarding the second
half." Samsung is wary of oversupply and price cuts for memory chips,
along with a potential further decline in prices of the panels used in LCD
televisions.
"Combining these with the possible appreciation of
the won, we expect overall fourth-quarter business conditions to be
difficult," said Samsung vice president Robert Yi on a conference call with
analysts.
What happens to Samsung matters because it is such a
major force in the global electronics industry. Besides dominating in memory
chips and flat screen TVs, the company is also the world's largest manufacturer
of large-sized liquid crystal displays and ranks second in mobile phones behind
Nokia Corp. of Finland.
The company manufactures both DRAM chips, used mostly in
personal computers, and NAND flash memory chips, used in products such as
digital cameras, music players and smartphones.
Samsung earned 4.46 trillion won ($3.97 billion) in the
three months ended Sept. 30, up from a net profit of 3.81 trillion won the
previous year.
Its semiconductor business boasted record sales of 10.66
trillion won during the quarter, while revenue in the memory division rose 60
percent from the year before.
That led pushed overall sales up 12 percent to 40.23
trillion won, also a record and the first time the company's revenue has
surpassed the 40 trillion won mark.
Over in Tokyo, Sony reported net profit of 31.1 billion
yen ($375 million) for the July-September quarter, a huge turnaround from
losses of 26.3 billion yen a year earlier.
The results were so good the company raised its profit
outlook and expressed confidence that it could weather turbulence, including a
persistently strong yen.
The solid results reflect the success of cost cuts and
restructuring carried out under Chief Executive Howard Stringer. Since taking
over in 2005, the Welsh-born CEO has been trying to unite the company's
sprawling businesses and improve efficiency.
Revenue climbed 4.3 percent to 1.73 trillion yen. Its
"Networked Products and Services" division, which includes gaming and
PCs, did particularly well. The September launch of the highly anticipated
PlayStation Move motion-sensing game controller helped drive demand, the
company said.
Of its three previously money-losing businesses - TVs,
games and mobile handset maker Sony Ericsson - the latter two are now in the
black. Sony's Kato said the company is trying to break even in TVs.
He acknowledged that Sony lags Samsung in profit growth
but said the two companies aren't necessarily comparable.
"Our business model is different," Kato said.
"One of our assets is our mix of hardware, software and content."
"We will compete on this overall basis." In its forecast revision,
Sony expects net profit of 70 billion yen, 17 percent more than its previous
forecast of 60 billion yen.
But it lowered its sales outlook slightly to 7.4 trillion
yen due to the impact of the strong yen, which erodes income brought back to
Japan from overseas sales.
Panasonic, Japan's biggest home appliance maker, made a
profit of 31 billion yen ($384.3 million) in the three months through
September, up from 6.1 billion yen the year before.
Quarterly revenue rose 27 percent year-on-year to 2.21
trillion yen. Lower materials costs and other expenses helped offset the impact
of growing price competition and an appreciating yen, which hit a 15-year high
during the quarter.
The Osaka-based company is pushing ahead with a strategy
to strengthen its green technology business. It recently raised its stake in
Sanyo Electric - a money-losing unit with strong battery and solar panel
businesses - to more than 80 percent and intends to take full ownership by the
end of March.
But an increasingly precarious future kept Panasonic from
revising up its forecasts for the fiscal year through March 2011. It still
expects a profit of 85 billion yen on sales of 8.9 trillion yen.
It expects an uncertain business environment to continue
into the end of the year "with further price declines due to
ever-intensifying competition, appreciation of the yen and rising prices for
raw materials."
