Samsung posts record profit; mobile growth dips
Quotes

Samsung posts record profit; mobile growth dips

Last Updated: Friday, July 26, 2013, 08:54
 
 Comment 0
 
Samsung posts record profit; mobile growth dips
Seoul: Samsung Electronics Co Ltd is under mounting pressure to produce eye-catching new smartphones after its mobile business shrank 3.5 percent in the second quarter, taking the gloss off a record USD 8.5 billion operating profit.

The South Korean IT giant on Friday said April-June operating profit increased 47.5 percent from a year ago to 9.53 trillion won, in line with its estimate.

Profits at its mobile division, the biggest earnings generator, jumped 52 percent to 6.28 trillion won from a year ago but fell 3.5 percent from the previous quarter.

The reporting period included the launch of its flagship Galaxy S4 in April, backed by a massive advertising campaign, in Samsung's biggest assault yet on arch rival Apple Inc's iPhone.

Samsung said global smartphone sales growth may weaken in the third quarter and expected stiffer competition due to new product launches.

As the high-end smartphone market, which Samsung dominates along with Apple, slows in mature markets, the Asian firm is now running into trouble convincing investors that it can sustain strong growth by cracking into the more popular low-end segment.

Its competitors in that segment include natives of China, the world's biggest smartphone market, such as Huawei Technologies Co Ltd and ZTE Corp.

"As we go into a typically strong season for the IT industry, we expect earnings to continue to increase," Samsung said in its earnings statement.

"However, we cannot overlook delayed economic recovery in Europe and risks from increased competition for smartphones and other set products."

Samsung said its 2013 capital spending would rise by more than 1 trillion won to 24 trillion won this year from 2012, joining rivals seeking to boost output. It said it may further increase investment depending on market conditions.

The world's biggest maker of memory chips and televisions also said profits from its chip business rose 71 percent to 1.76 trillion won on the back of soaring prices for semiconductors used in personal computers and mobile devices.

Shares of Samsung have lost 14 percent or 32.7 trillion won since early June, hit by a series of brokerage downgrades as concerns mount that its handset margins may drop on weakening sales of the S4 and slowing high-end market growth.

Apple on Tuesday reported stronger-than-expected iPhone sales, easing investor concerns that growing competition is hurting demand for its top-selling product.

But its quarterly profit fell 22 percent and gross margins slid below 37 percent from more than 42 percent in the year-ago quarter, in the absence of new products.

Samsung does not provide its smartphone sales breakdown, but analysts estimate about 72 million to 75 million devices were sold in the second quarter, widening the gap with second-ranked Apple.

The California-based firm sold 31.2 million iPhones in the April-June quarter, as it struggles with falling market share in China.

Reuters



First Published: Friday, July 26, 2013, 08:50


Comments


comments powered by Disqus
New York Auto Show
New York Auto Show
Top Businesswomen in India
Top Businesswomen in India
World`s top ten billionaires 2014
World`s top ten billionaires 2014
2014 Geneva International Motor Show
2014 Geneva International Motor Show
Geneva Auto Show 2014
Geneva Auto Show 2014

Web Wrap
Contact Us : Privacy Policy : Legal Disclaimer
Copyright © Zee Media Corporation Ltd. All rights reserved