Samsung soars to record operating profit in Q2 on back of smartphones
Samsung Electronics posted a record operating profit for the second quarter, as sales of its smartphones likely helped goose its earnings despite weak macroeconomic conditions.
The company, which became the world's largest overall handset maker in the first quarter, reported an operating profit of between $5.7 billion and $6 billion in the quarter, up from an operating profit of $3.28 billion in the year-ago period. Samsung's previous quarterly operating profit record was $5.12 billion in the first quarter of 2012.
Samsung's numbers are preliminary estimates; the company will report its full earnings later this month. However, they give an indication of the company's continued strength despite the debt crisis in Europe and fears of a slowdown in the United States. Samsung's overall sales of around $41 billion in the quarter missed estimates of $43.6 billion that analyst polled by Bloomberg had been expecting.
In its estimates, Samsung did not break out its sales for its telecommunications or handset divisions, but the company's smartphone sales account for around half of its operating profit. The company's Galaxy line has proved to be an extraordinary resilient brand, despite strong Android brands from the likes of HTC and Motorola and efforts by Apple (NASDAQ:AAPL) to block Samsung's sales through patent lawsuits.
J.K. Shin, head of Samsung's mobile division, said in late June that the company expected sales of its flagship Galaxy S III smartphone to surpass 10 million units by July. Tight supplies forced U.S. wireless carriers to push back their launches of the phone, but Samsung is now selling the gadget through five U.S. carriers: Verizon Wireless (NYSE:VZ), AT&T Mobility (NYSE:T), Sprint Nextel (NYSE:S), T-Mobile USA and U.S. Cellular. C Spire Wireless also plans to sell the device later this year.
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this Reuters article
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