Samsung posts record US$8.5bn profit

Samsung has posted another company record quarterly operating profit that was marred by a slight recession in its mobile business.

Samsung lauded sales of its Galaxy S4 in the second quarter.
(Credit: CNET)

The South Korean electronics giant's second-quarter operating profit for the period ended 30 June was KRW9.53 trillion (AU$8.2 billion), an increase of 47 per cent over a year ago, the company announced in a statement. Though the results were in line with company guidance issued earlier this month, analysts had been expecting an operating profit of KRW10.1 trillion (AU$9.8 billion).

However, operating profit from Samsung's mobile division, which accounts for two thirds of its revenue, rose 52 per cent to KRW6.28 trillion (AU$6.02 billion) from a year ago, but declined 3.5 per cent from the previous quarter.

Samsung, which released the GS4 in April, boasted in May of having sold more than 10 million units to retailers and wireless operators less than a month after the handset's debut. However, worries that the company's flagship smartphone was nearing market saturation led more than a dozen analysts to cut their earnings projections for the smartphone maker last month.

Samsung said it expects smartphone sales to be strong in the third quarter, but at a slower pace.

"Entering into a typically strong season for the IT industry, we expect earnings to continue to increase," Robert Yi, head of investor relations at Samsung, said in a statement. "However, we cannot overlook delayed economic recovery in Europe and risks from increased competition for smartphone and other set products."

Before a slight decline in the first quarter, Samsung had posted a string of five consecutive quarters of record profits.

Apple, Samsung's chief rival in the mobile industry, also experienced a slowdown in the smartphone market last quarter. On Tuesday, Apple revealed that it sold 31.2 million iPhones in its fiscal third quarter, a solid achievement compared with the 26 million units it sold in the year-ago quarter, but a decline from the second quarter of the year, when Apple shipped 37.4 million of its smartphones.

Samsung's semiconductor unit posted an operating profit of KRW1.76 trillion won (AU$1.6 billion), compared with 1.03 trillion won (AU$1.7 billion) a year earlier. Operating profit in its display unit jumped 57 per cent to KRW1.12 trillion (AU$1.08 billion), while profits in its consumer-electronics division fell 41 per cent to KRW430 billion (AU$417 million).

Via CNET.com



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