South Korean conglomerate Samsung Electronics Co. Ltd. (SSNLF) reported late Thursday that profit for the second quarter surged 48 percent from last year as the continued strong demand for Galaxy S and SII smartphones more than offset weakness in other businesses. Sales and operating profit for the quarter came in line with Samsung's guidance released earlier in the month.
Suwon, South Korea-based Samsung is forecast to sell 220 million smartphones in 2012, more than double the amount it shipped in 2011. It ended Nokia Corp.'s (NOK: Quote) decade-long dominance in the mobile phone market in 2011.
Samsung has reportedly beaten rivals US technology giant Apple, Inc. (AAPL: Quote) hands down in second-quarter smartphone shipments, selling 50.5 million units and taking 34.6 percent share of the global smartphone market, nearly double the 26 million iPhones sold by Apple. The third spot remained with Nokia after it reportedly sold 10.2 million smartphones, with a 7 percent market share.
Samsung is now expected to gear up to match or beat Apple, which is in the process of launching a new iPhone in the third quarter, and also a smaller mini iPad priced at about $199.
The world's largest technology firm by revenue reported net profit of 5.19 trillion won or $4.5 billion for the second quarter, up 48 percent from 3.51 trillion won in the prior-year quarter, and 3 percent higher than 5.05 trillion won in the preceding first quarter.
Total sales for the quarter increased around 21 percent to 47.60 trillion won from last year's 39.44 trillion won, and also grew 5 percent from 45.27 trillion won in the prior quarter.
Total operating profit surged 79 percent to 6.72 trillion won, with operating margin expanding 460 basis points to 14.1 percent from a year ago.
Earlier in the month, Samsung had estimated second-quarter sales of about 47 trillion won, with an operating profit of about 6.7 trillion won.
Quarterly sales at Samsung's telecommunication division surged 60 percent to 24.04 trillion won, with 75 percent growth in mobiles sales.
Meanwhile, sales at the semiconductor division, once the main source of income for the company, declined 6 percent to 8.60 trillion won, with memory sales dropping 8 percent.
Display panel division's sales grew 16 percent to 8.25 trillion won, despite LCD panel sales declining 2 percent, as sales of OLED panels increased amid new smartphone product launches.
Looking ahead, Samsung is expected to continue reporting strong earnings in 2012, with smartphone and tablet shipments likely to increase sharply, and demand growth expected in emerging markets amid seasonality. Demand turnaround is also expected for DRAM, with slight price increases.
Further, demand for TV is expected to pick up due to the year-end peak demand and Chinese National holiday amid China's subsidy policy to stimulate TV demand.
The demand for LED TV and digital appliances are also expected to continue growing in the emerging markets, while demand in the developed markets could turn negative amid the European economic slowdown.
Samsung shares are currently trading up 54,000 won or 4.61% in Friday's regular trading at 1,226,000 won on the Kospi on a volume of 0.34 million shares.
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by RTT Staff Writer
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