Samsung's Q2 earnings hit new high on smartphone sales

Seoul, July 26: Samsung Electronics, the world's largest maker of handsets, memory chips and flat screens, said Friday that its operating profit hit a new quarterly high in the second quarter on robust demand for its flagship smartphones and mobile device-related components.

Operating profit jumped 47.5 percent from a year earlier to 9.53 trillion won ($8.54 billion) in the three months ending June 30, the company said in a statement.

The figure topped the previous record high of 8.84 trillion won (South Korean currency, symbol ₩) tallied in the fourth quarter of last year.

Sales increased 20.73 percent year-on-year to ₩57.46 trillion in the second quarter, breaching the prior high of ₩56.06 trillion registered in the fourth quarter of 2012.

Net profit was ₩7.77 trillion, up 49.69 percent from a year earlier and rising 8.65 percent from three months ago.

The IT & Mobile Communications (IM) division, which makes handsets, logged an operating profit of ₩6.28 trillion on a revenue of ₩35.54 trillion, which accounted for more than 60 percent of the total sales.

Solid sales of Samsung flagship Galaxy S4 and Galaxy Note 8.0 drove the outperformance. Sales of Galaxy S4, the latest version of the Galaxy series, were estimated at over 20 million units during the quarter. Combine sales of smartphones, including previous models such as Galaxy S3, were estimated at 74.5 million units, up 5.7 percent from three months earlier.

The semiconductor business registered 8.68 trillion won in revenue. Global demand for PC DRAM remained weak, but orders for high value-added server and mobile DRAMs stayed strong, the company said, noting that steady demand for affordable smartphones and tablets shored up NAND sales.

Samsung planned to ramp up sales of application processors, saying that demand for the components would grow as mobile devices needing more processing power roll out into market in the remaining quarters.

The display panel business posted an operating profit of ₩1.12 trillion on a revenue of ₩8.18 trillion in the second quarter. The revenue jumped 46 percent compared with three months earlier on the back of sales in high value-added panels.

The company said it improved profitability in the quarter by expanding sales in high value-added products such as high- resolution display for tablets, large-size premium TV panels and OLED displays for smartphones.

The TV-making consumer electronics division logged an operating profit of ₩430 billion on a revenue of ₩12.78 trillion. Sales of premium TVs and strong seasonality for air conditioners helped improve the division's sales performance.

Samsung drew a rosy picture for future earnings. "We expect to improve profit yields in the second half due to high-margin, differentiated components products, as well as gains stemming from increased smartphone and TV shipments," said Robert Yi, senior vice president of Samsung.

Samsung spent ₩5.2 trillion on facility investment in the second quarter. A total of ₩9 trillion, or 38 percent of this year's planned capital expenditure, was made in the first half of 2013.

IANS