Samsung Electronics, the world's top maker of memory chips and televisions, estimated on Friday its July-September operating profit would fall 14 percent from a year ago, as persistent declines in semiconductor and flat screen prices outweigh a strong profit recovery in its handset business.

The South Korean firm estimated its quarterly operating profit at 4.20 trillion won ($3.5 billion), compared with a consensus forecast of 3.4 trillion won by analysts surveyed by Thomson Reuters I/B/E/S. That would be a 13.6 percent decline from a year ago but up 12 percent from the preceding quarter.

Following are reactions from analysts and fund managers:

JAMES SONG, ANALYST, HI INVESTMENT & SECURITIES

I am very surprised at the numbers. I am guessing either a particular lineup of products with higher margins sold well, or cost cutting measures were aggressively implemented.

In the fourth quarter, Apple's disappointing new iPhone may help spur demand for Samsung smartphones. One risk will be a slower than hoped recovery in the memory chip sector.

JANG IN-BEOM, ANALYST, BOOKOOK SECURITIES

Samsung has gained upside potential. Given Apple's relatively unchanged new iPhone, Samsung will have the opportunity to eat into Apple's market share with its hardware buildup and growing software power until next year, when the iPhone5 is expected to come out.

If chip prices see additional falls, it will negatively affect Q4 sales, and the outlook for flat screens is negative as well.

AHN SEONG-HO, ANALYST, HANWHA SECURITIES

I think Samsung's telecom business was a big positive surprise, and other businesses fared better than expected. I previously thought Apple's new iPhone would slow Samsung's handset earnings momentum, but there was no iPhone 5, and the iPhone 4S will not be a burden on Samsung in the fourth quarter.

The important thing is Samsung's strong earnings are not based on an overall demand recovery, but Samsung's own competitiveness. The macroeconomic situation will remain a major risk for Samsung in the fourth quarter.

(Reporting by Miyoung Kim, Hyunjoo Jin, Tae-yi Kim and Jungyoun Park; Editing by Jonathan Hopfner)

Apple inc. Ios Iphone Smartphone