Samsung Beats Expectations With $7 bn profit for Q2
Samsung Electronics beat market expectations in the second quarter with robust operating profit of 8.1 trillion won ($7 billion), up 21.3 percent from the previous quarter in its best performance in nearly two years. According to the April-June earnings guidance, Samsung reported operating profit of 8.1 trillion won, beating earlier market consensus of 7.4 trillion won and its 6.7 trillion won income in the previous quarter.
Sales rose to 50 trillion won in the second quarter from 49.8 trillion won in the previous quarter and 48.5 trillion won in the same quarter in 2015.
The revival of the mobile division fueled growth in the second quarter. Analysts estimate the company has pulled in more than 4 trillion won profit from the mobile division. Its new flagship Galaxy S7 series released in March were sold over 1.6 million units in the second quarter and 1 million in the first. The cheaper smartphone models A and J series also were steady sellers.
The consumer electronics division is estimated to have raked in a profit of near 1 trillion won thanks to demand in the global TV market ahead of the Euro 2016 soccer game that started last month and the 2016 Summer Olympics in Rio de Janeiro, Brazil coming up in August. Profit improved due to robust sales in high-end products.
Samsung also kept up profitability in chip-making even as memory chip prices tumbled by bringing down production cost through fab upgrade.
The average price of dynamic random access memory came down. The company timely shifted to cost-effective next-generation fab through the application of 10 nano-class chip-making technology and become the only company to produce highly lucrative 3D V-NAND (vertical non-volatile storage) flash memory chip.
It also quickly veered the display division away from liquid crystal display (LCD) that lacked competitiveness from overcapacity due to expansion by Chinese rivals towards more profitable organic light-emitting diode (OLED) panels. The division is estimated to have earned from 200 billion won to 300 billion won in the second quarter.