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Samsung Q2 Profit Rises; Sees Gradual Recovery In Demand For Mobile In H2

Samsung Electronics Co Ltd (SMSN.L,SSNNF.OB,SSNLF.OB) reported a profit for the second-quarter that increased about 8.38 percent from last year. Quarterly operating profit also increased 23.48 percent from last year due to higher demand for memory chips and appliances, as well as a one-off gain at its Display Panel Business. But, sales decreased about 5.63 percent, due to reduced sales of smartphones and other devices.

The company stated that earnings from the Memory Business improved, led by solid demand from datacenters and PCs. However, slower demand for mobile memory resulted in weaker NAND bit growth compared to the market. System LSI reported lower earnings amid weakness in the mobile market while the Foundry Business saw a recovery in customer demand.

Looking ahead to the second half of 2020, the company expect a gradual recovery in demand for mobile devices and consumer electronics. But, risks remain due to persisting uncertainties from COVID-19 and growing competitions.

For the Memory Business, the company expects demand for mobile and graphic memory to recover driven by new smartphones and game consoles.

The company said, for system semiconductors, that it will focus on expanding sales of key products such as high-resolution sensors and 5G system-on-chips (SoCs).

For PC, desktop demand is expected to be weak but low-end laptop demand is likely to remain solid.

In the Display Panel Business, the company projects a full-fledged rebound in earnings from mobile displays in the fourth quarter, as a recovery in mobile phone demand during the third quarter will likely be limited to mid- and low-end models.

Looking to the second half, overall demand for DRAM is expected to pick up from new smartphone launches, while uncertainties remain around geopolitical issues including trade disputes and the pace of higher content-per-box adoption.

The Mobile Communications Business plans to unveil new flagship smartphones including the Galaxy Note and a foldable phone, while seeking to expand sales of mid-tier models. The smartphone market is expected to witness intensifying competition amid a gradual recovery in demand in the second half of the year.

Looking ahead to the third quarter, smartphone sales are expected to rise quarter -over-quarter.

Samsung reported that its net income attributable to the shareholders of the parent company for the second-quarter rose 8.38 percent to 5.49 trillion Korean won from 5.06 trillion won last year.

The company's operating profit also increased 23.48 percent to 8.15 trillion won from last year's 6.60 trillion won.

Sales for the second-quarter decreased 5.63 percent to 52.97 trillion won from 56.13 trillion won in the prior year.

The Semiconductor businesses posted 18.23 trillion won in consolidated revenue and 5.43 trillion won in operating profit in the second quarter.

The company stated that Memory Business saw robust demand for cloud applications related to remote working and online education as the impact from COVID-19 continued, while demand for mobile was relatively weak.

The Display Panel Business posted 6.72 trillion won in consolidated revenue and 0.30 trillion won in operating profit for the second quarter.

The IT & Mobile Communications Division posted 20.75 trillion won in consolidated revenue and 1.95 trillion won in operating profit for the second quarter.

The Consumer Electronics Division, comprised of the Visual Display and Digital Appliances businesses, reported 10.17 trillion won in consolidated revenue and 0.73 trillion won in operating profit in the second quarter.

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