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Samsung posts record quarterly profit, notes cellphone market slowdown

updated 09:02 pm EDT, Thu July 25, 2013

Profits driven by mobile, specifically Galaxy S4 smartphone launch

Samsung Electronics today announced revenues of 57.46 trillion won ($49.28 billion) for the second quarter ended June 30, a nine percent increase from the previous quarter. Consolidated operating profit for the quarter reached 9.53 trillion won ($8.58 billion), also representing a nine percent increase on quarter, while consolidated net profit for the same quarter was 7.77 trillion won ($6.99 billion).

In contrast to the first half of last year, revenue was up 19 percent and operating profit increased 51 percent in the first half of 2013 as profitability in the components business improved. The profit ratio reached 16.6 percent in the first six months of the year compared with 13.1 percent recorded in the same period last year. Samsung expects to see solid growth and the components business' contribution to profits will gradually increase.

Highlighting the quarterly performance, growth remained steady in the high-end smartphone and premium television businesses. Most noticeably, a growth spurt in shipments for OLED panels for smartphones and high consumer demand for air conditioners spurred growth. Led by the much-awaited launch of the Galaxy S4, smartphone shipments and revenue increased from the March quarter (though the S4 itself is said to be doing less well than expected). The strong growth streak for the smartphone market is expected to continue in the third quarter albeit at a slower pace.

The IT & Mobile Communications division - consisting of Mobile Communications, Networks and Digital Imaging businesses - posted operating profits of 6.28 trillion won ($5.65 billion) on 35.54 trillion won ($31.99 billion) in revenue for the June quarter. Out of the total earnings, the mobile business was responsible for 34.58 trillion won ($31.12 billion).

Driven by its overall smartphone line and the Galaxy Note 8.0, quarterly revenue for the mobile sector climbed nine percent compared with the prior quarter. Average selling price of Samsung smartphones will likely be impacted due to a wider range of low- to mid-priced smartphones hitting the market. Sales of tablet PCs are expected to remain solid and Samsung is looking to expand global sales with a broad portfolio of models including the Galaxy Tab 3.

The Display Panel segment's operating profit jumped 46 percent on quarter to 1.12 trillion won thanks to strong demand for high value-added panels for IT and TV panels sized 60-inch and over. A mid- to low-end TV lineup targeting emerging markets and a range of premium TV offerings were credited for the Visual Display business' earnings. As for the next quarter, uncertainties over Europe's economy and Chinese subsidies for electronics goods could possibly hinder growth.

Samsung's Semiconductor businesses -- including Memory and System LSI -- posted 8.68 trillion won ($7.81 billion) in consolidated revenue. The Memory chip business reached earnings of 5.70 trillion won ($5.13 billion)or an 11 percent spike in revenue quarter-on-quarter. Global demand for PC DRAM remained weak, while orders for high value-added server and mobile DRAMs stayed strong.

By Electronista Staff
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