Samsung posts record $5.9 bn profit for second quarter

Samsung posts record $5.9 bn profit for second quarter New Delhi/Seoul: It was the massive sale of the Galaxy smartphones that drove Samsung Electronics to make a record quarterly profit of USD 5.9 billion.

According to reports, the flagship Galaxy phones are likely to have stretched their lead over rivals Apple and Nokia despite a parts shortage that meant it struggled to keep up with stronger-than-expected demand for its latest S III model.

Profit from the mobile division is likely to have more than doubled to around 4.4 trillion won from a year ago, with sales of around 50 million smartphones - at a rate of 380 every minute.

Current quarter mobile profits are expected to forge further ahead as the latest Galaxy model enjoys a boom before the next iPhone launch. Samsung's overall third-quarter operating profit is likely to be between 7.3 trillion won and 8.5 trillion won, an increase of as much as 27 percent from the second quarter, according to a survey of 13 analysts. The mobile business brings in more than 70 percent of Samsung's earnings.

While the next iPhone, expected later this year, will likely slow Samsung's handset earnings growth, it will boost the Korean firm's semiconductor earnings as Samsung is the sole producer of processing chips used to power the iPhone and iPad, and also supplies Apple with mobile memory chips, NAND flash and display screens.

While strong handset sales grab the headlines, more than doubling profit growth, other businesses such as chips and consumer electronics are battling weak prices and demand and a limping euro, which eats away at repatriated profits.

In a sign that the euro zone crisis is exercising minds in boardrooms around the globe, Samsung executives said this week the group was operating to a contingency plan.

The euro has fallen around 5 percent against the Korean won since April, and about 8 percent in the past year, to 2-year lows.

In its April-June earnings guidance on Friday, Samsung, valued at USD 170 billion and the world's leading maker of TVs, smartphones and DRAM memory chips, estimated operating profit jumped 79 percent to 6.7 trillion won from a year ago - in line with an average forecast in a survey of 23 analysts.

That would be 14.5 percent higher than the previous record quarterly profit in January-March.
Samsung estimated its second-quarter revenue at 47 trillion won, just below a 50 trillion won forecast.

With Agency Inputs