Samsung reports record profits

Samsung phones Lee Jin-man/AP/Press Association Images

Samsung, the world's largest technology firm by revenue, has reported another record high quarterly profit as customers flocked to Galaxy smartphones amid the absence of competitors, which helped the South Korean firm outdo rivals even at one of the most challenging times for the global tech industry.

Samsung Electronics said its net profit reached a record high of 5.2 trillion won (£2.9 billion) in the three months ending in June, a 48% jump from a year earlier.
But the bottom line was lower than a median market consensus of 5.6 trillion won based on a poll of seven analysts by Yonhap Infomax.

Its second-quarter operating profit spiked 79% over a year earlier to 6.7 trillion won and its revenue rose 21% to 47.6 trillion won, matching Samsung's guidance released earlier this month. The operating profit, also at an all-time high, marked a 15% rise from the previous quarter. Shares of Samsung opened 1.9% higher in Seoul after the quarterly financial results announcement.

Samsung, the world's largest maker of mobile phones, televisions and memory chips, benefited from runaway demand for its Android-powered smartphones, as rivals including Apple were slow to release new models.

Robust sales of Samsung's high-end mobile gadgets, including the flagship Galaxy S3 smartphone, helped Samsung tide over a slowdown in other consumer electronics sectors such as televisions and personal computers that have been painful for its rivals and component suppliers.

Despite nagging worries about debt-crippled Europe, analysts are expecting Samsung to renew its record high profit in the third quarter when Galaxy S3 sales reach their peak before Apple unveils its new iPhone, largely anticipated in October.

"The third quarter is expected to be marginally positive as demand for consumer electronics goods, including smartphones and tablets, remains strong and a stream of new products hit the market. Supply for display panels is also expected to increase as TV makers prepare for the year-end holiday season," Samsung said.

In the second quarter, Samsung's mobile business contributed 63% of Samsung's entire operating profit by generating 4.2 trillion won profit. Analysts guess Samsung sold around 50 million smartphones in the second quarter, including about 6.5 million Galaxy S3 phones.

Although the company does not release its mobile phone sales figures, Samsung probably outperformed competitors in the top-end smartphone segment, while having a tougher time competing with Chinese brands such as ZTE and Huawei in the low-end smartphone markets, analysts said.

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