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October 27, 2010, 10:24 PM EDT
By Jun Yang
(Updates with analyst?s comment in fourth paragraph.)
Oct. 28 (Bloomberg) -- SK Telecom Co., South Korea?s largest mobile-phone operator, reported third-quarter profit that missed analysts? estimates after an increase in marketing and labor costs.
Net income fell 13 percent to 363.9 billion won ($322 million), the Seoul, South Korea-based company said in a statement today. That was lower than the 425 billion-won average of 12 analyst estimates compiled by Bloomberg. Sales rose 4.1 percent to 3.18 trillion won.
Marketing costs rose 1.5 percent to 751 billion won as the company stepped up promotions to fend off mounting competition from KT, the nation?s exclusive provider of Apple Inc.?s iPhone. SK plans to invest 1 trillion won to develop mapping, instant- messaging and social-networking services for handsets.
?For the fourth quarter, the iPhone?s negative impact and SK Telecom?s aggressive marketing will continue,? David Lee, a Seoul-based analyst at CLSA Asia-Pacific Markets, wrote in an Oct. 20 report. SK?s profit growth may be capped in this quarter by increasing marketing costs, according to the report.
SK?s operating profit fell 16 percent to 519.3 billion won, missing the 565 billion-won average of nine analyst estimates compiled by Bloomberg.
SK shares traded unchanged at 172,500 won at 11:06 a.m. in Seoul trading, while the benchmark Kospi index declined 0.3 percent.
The company has more than 55 percent share in the smartphone market of South Korea, where about 4.5 million devices were sold by the end of third quarter, according to Hanwha Securities? Park.
More than 1 million iPhones were sold in South Korea since the first model went on sale in the country at the end of 2009, according to KT Corp.
--Editors: Vipin V. Nair, Young-Sam Cho
To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net
To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net
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(Updates with analyst?s comment in fourth paragraph.)
Oct. 28 (Bloomberg) -- SK Telecom Co., South Korea?s largest mobile-phone operator, reported third-quarter profit that missed analysts? estimates after an increase in marketing and labor costs.
Net income fell 13 percent to 363.9 billion won ($322 million), the Seoul, South Korea-based company said in a statement today. That was lower than the 425 billion-won average of 12 analyst estimates compiled by Bloomberg. Sales rose 4.1 percent to 3.18 trillion won.
Marketing costs rose 1.5 percent to 751 billion won as the company stepped up promotions to fend off mounting competition from KT, the nation?s exclusive provider of Apple Inc.?s iPhone. SK plans to invest 1 trillion won to develop mapping, instant- messaging and social-networking services for handsets.
?For the fourth quarter, the iPhone?s negative impact and SK Telecom?s aggressive marketing will continue,? David Lee, a Seoul-based analyst at CLSA Asia-Pacific Markets, wrote in an Oct. 20 report. SK?s profit growth may be capped in this quarter by increasing marketing costs, according to the report.
SK?s operating profit fell 16 percent to 519.3 billion won, missing the 565 billion-won average of nine analyst estimates compiled by Bloomberg.
SK shares traded unchanged at 172,500 won at 11:06 a.m. in Seoul trading, while the benchmark Kospi index declined 0.3 percent.
The company has more than 55 percent share in the smartphone market of South Korea, where about 4.5 million devices were sold by the end of third quarter, according to Hanwha Securities? Park.
More than 1 million iPhones were sold in South Korea since the first model went on sale in the country at the end of 2009, according to KT Corp.
--Editors: Vipin V. Nair, Young-Sam Cho
To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net
To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net
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