Oct. 6 (Bloomberg) -- Samsung Electronics Co., Asia’s biggest maker of chips, flat screens and mobile phones, reported third-quarter earnings more than doubled, exceeding analysts’ estimates, helped by a rebound in prices.

Operating profit jumped to as high as 4.3 trillion won ($3.7 billion), compared with 1.48 trillion won a year earlier, the Suwon, South Korea-based company said in a statement today. Samsung climbed as much as 1.9 percent in Seoul trading after the preliminary results beat the 3.85 trillion won median estimate in a Bloomberg survey of 10 analysts.

Higher prices of chips and flat screens, coupled with increasing demand for Samsung’s mobile phones and televisions, prompted analysts at brokerages including Morgan Stanley to raise their earnings estimates for the company in the past month. The won’s drop of about 13 percent against the yen also helped Samsung earn more from TVs and cameras than Japan’s Sony Corp. and Panasonic Corp.

“The results were a surprise,” said Choi In Ho, a fund manager at UBS Hana Asset Management Co., which manages the equivalent of $17 billion in assets. “The market probably wants to know if these earnings are sustainable.”

Shares advance

Samsung, which will disclose detailed earnings results later this month, closed 0.3 percent lower at 745,000 won on the Korea Exchange, while the benchmark Kospi stock index dropped 0.5 percent. The stock has gained 65 percent this year.

The preliminary figures disclosed today are consolidated, meaning they include earnings from overseas affiliates. Operating income, or sales minus the cost of goods sold and administrative expenses, ranged from 3.9 trillion won to 4.3 trillion won, while revenue was between 35 trillion won and 37 trillion won, Samsung said. The company began providing quarterly guidance in July.

“Nearly all of its major businesses are at the early stages of the recovery cycle, supporting continued earnings growth,” Keon Han, an analyst at Morgan Stanley, wrote in a report Sept. 21. “We see an upward earnings trajectory.”

Samsung, the world’s largest maker of computer-memory chips, said last month the global industry has bottomed out following a three-year slump. The $18.4 billion industry is set for a recovery that may last two years, according to Morgan Stanley.

Chip Market

Global revenue of dynamic random access memory may climb 21 percent to $22.4 billion in 2010, the first gain in four years, after chipmakers scaled back production and as personal- computer demand rises, according to Morgan Stanley’s Han.

Prices of the benchmark DRAM chip, which temporarily holds data and helps computer processors run multiple programs simultaneously, have almost tripled this year after falling 62 percent in 2008, according to Dramexchange Technology Inc., operator of Asia’s biggest spot market for semiconductors.

Profit from the chip business probably increased almost fivefold to 960 billion won in the third quarter, according to the Bloomberg survey of analysts. Income from the flat-panel division may have more than doubled to 968 billion won, while operating income from the mobile-phone division probably increased 19 percent to 1 trillion won, according to the survey.

TV Prices

Prices of 37-inch liquid-crystal display TV panels had risen 4 percent as of Sept. 21, compared with three months ago, according to estimates at Taipei-based researcher WitsView Technology Corp. Prices of 19-inch monitor panels rose 15 percent, while 15.4-inch notebook panels gained 13 percent in the period, according to WitsView.

“The results from all its businesses seem to have fared well in the quarter,” Jay Kim, an analyst at Hyundai Securities Co. in Seoul, said. “Recent expectations had been rising so it’s not a big surprise and the key now is the fourth quarter.”

Samsung’s digital media division, which makes televisions, probably posted a profit of 814 billion won, compared with a loss a year earlier, according to the analyst survey, as the company increased sales of more expensive models and widened its lead in the TV industry over Japanese rivals.

The won has fallen about 13 percent versus the yen in the year ended Sept. 30, according to data compiled by Bloomberg.

Last week, Austin, Texas-based researcher DisplaySearch raised its full-year estimate for the global LCD television market, citing demand from China and North America and as more consumers replace their bulkier glass-tube sets.

Global LCD TV shipments will rise 24 percent to 130 million units, compared with an earlier prediction of 127 million sets, the research firm said. Worldwide revenue from LCD TVs will drop 3 percent this year, less than its earlier projection for a 6 percent decline, according to DisplaySearch.

To contact the reporters on this story: Kevin Cho in Seoul at kcho2@bloomberg.net

Last Updated: October 6, 2009 07:09 EDT