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Samsung Electronics’ Q2 sales up 4%

Samsung Electronics, the world top television and memory chip maker, posted its operating profit for the second quarter of 3.75 trillion won ($3.55 billion), down 25.2 percent from the same period last year.

The company also announced it recorded 39.44 trillion won in revenue ― a 4-percent increase year-on-year ― and 3.51 trillion won in net income from April-June, down 18 percent compared to last year’s second quarter.
Samsung Electronics chairman Lee Kun-hee (second from right, front row) attends an exhibition on advanced global IT products at the company’s Suwon unit on Friday. (Yonhap News)
Samsung Electronics chairman Lee Kun-hee (second from right, front row) attends an exhibition on advanced global IT products at the company’s Suwon unit on Friday. (Yonhap News)

Driven by its strong line-up of smartphones, especially the Galaxy S 2 mobile phone, telecommunications unit led the revenue growth with sales rising 43 percent year-on-year. The operating profit for the unit was also set at 1.67 trillion won, up 165 percent from the same period last year.

Sales for digital media and appliances unit also surged from the previous quarter, but the weakened demand curbed margins for the semiconductor and display panel businesses, according to Samsung officials.

Total sales for the display panel unit reached 7.09 trillion won and its operating profit recorded a deficit of 210 billion won.

“Despite the challenging business environment and global economic uncertainties, we achieved continued year-on-year revenue growth in the second quarter driven by mobile device sales, particularly by the success of our smartphones,” said Robert Yi, head of the investor relations team at Samsung. “Heading into the third quarter ― which typically sees increased consumer demand for electronics ― we expect competition to remain tight, and will continue to enhance our cost competitiveness and technology leadership in the components businesses.”

Samsung’s second quarter earnings figure was higher than the company’s median report released earlier this month, but it still did not meet expectations due to sluggish sales of the global IT industry, industry watchers said.

They added that a grim outlook is projected for the company in the third quarter as all units excluding telecommunications ― such as semiconductor, digital display, digital media and appliances ― are not expected to see sharp growth.

“All projections for the latter half, except for telecommunications, seem to be on the conservative side,” said Park Hyun, an analyst at Tongyang Securities. “It somewhat met the expectations in the second quarter but it’s difficult to give an optimistic projection for the second half of this year.”

Noh Geun-chang, an analyst at HMC Investment Securities, also said it will not be easy for Samsung Electronics to increase operating profit in the third quarter.

Samsung Electronics’ shares on Friday closed at 844,000 won, up 7,000 won from the previous day.

By Cho Ji-hyun (sharon@heraldcorp.com)
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