Samsung reports record-setting $5.9 billion quarterly profit
updated 09:39 pm EDT, Thu July 26, 2012
Manufacturer optimistic of third quarter successes
Samsung, the world's top technology manufacturer by revenue, reported a record 6.72 trillion won ($5.9 billion) quarterly profit, up 79 percent from the same time last year. Revenue was boosted by $3.65 billion solely from its smartphone sales, as predicted by analysts and Samsung itself. The company reports television sales up from last year, primarily from 3D and LED models. Memory chip and processor sales fell slightly from the same period last year.
"Despite a difficult business environment, we achieved stable profits in the second quarter through our differentiated products and competitive technology," said Samsung Senior Vice President and Head of Investor Relations Robert Yi. "As we move into the second half, continued fiscal instability in Europe and its effect on the global economy will result in the possibility of a slower-than-expected recovery and intensified market competition."
Samsung expects the third quarter to be positive as global sales of consumer electronic goods remain strong, and a stream of new products arrive on the market. TV makers preparing for the holiday season are expected to boost sales from Samsung's display panel division. Samsung's own televisions are expected to maintain profitability through the end of the year because of the US holiday purchasing season as well as an energy-saving subsidy in China boosting demand for new models.
Weak global demand for PC DRAM chips caused a six percent decline in sales, even with an increased demand for server and mobile device DRAM. Higher NAND demand for SSDs and assorted flash media implementations picked up sales volume, but price drops prevented any gain in profitability. Samsung expects no recovery in the DRAM market due to weak back-to-school orders, higher competition, and continued global economy instability. The NAND market may improve as the holiday shopping season approaches, causing higher demand.
The highly anticipated launch and follow-on sales of the Galaxy S III and Galaxy Note should bolster third quarter numbers similarly to the second quarter. Second quarter sales saw earnings jump by 75 percent from the same time a year ago. Samsung has not released sales numbers for the Galaxy S III, but analysts estimate sales for the new smartphone have topped 10 million since release, as compared to Apple's 26 million iPhone shipments in the same quarter.
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I wonder how much of that $5.9 Billion profit does Apple think "belongs" to them?? The Galaxy SIII sure has done well for Samsung. Good competition can only mean better and better phones for everyone - whatever they buy.