Galaxy phones drive Samsung to record profit

By Youkyung Lee ,AP

SEOUL — Samsung, the world’s largest technology firm by revenue, reported another record-high quarterly profit as customers flocked to Galaxy smartphones, helping it outdo rivals even at a challenging time for the global tech industry.

Samsung Electronics Co. said Friday its net profit swelled to 5.2 trillion won (US$4.5 billion) in the April-June quarter, a 48-percent jump from a year earlier. The earnings were lower than a median forecast of 5.6 trillion won in a poll of seven analysts by Yonhap Infomax, but investors still cheered the result, sending Samsung shares up 4.3 percent in Seoul.

Samsung, the world’s largest maker of mobile phones, televisions and memory chips, benefited from runaway demand for its Android-powered smartphones as rivals including Apple Inc. were yet to release new models.

The robust sales of smartphones such as the company’s flagship Galaxy S3 helped Samsung paper over a slowdown in other consumer electronics sectors such as televisions and personal computers that has been painful for its rivals and component suppliers.

Its second quarter operating profit spiked 79 percent over a year earlier to 6.7 trillion won and its revenue rose 21 percent to 47.6 trillion won, matching Samsung’s guidance released earlier this month. The operating profit, also at an all-time high, was up 15 percent from the previous quarter.

Despite nagging worries about debt-crippled Europe, analysts are expecting Samsung to achieve a record-high profit in the third quarter when Galaxy S3 sales are expected to reach a peak before Apple unveils its new iPhone, anticipated in October.

“The third quarter is expected to be marginally positive as demand for consumer electronics goods, including smartphones and tablets, remains strong and a stream of new products hit the market. Supply for display panels is also expected to increase, as TV makers prepare for the year-end holiday season,” Samsung said in a statement.

In the second quarter, Samsung’s mobile business contributed 63 percent of Samsung’s entire operating profit by generating 4.2 trillion won profit. Analysts estimate that Samsung sold around 50 million smartphones in the second quarter, including about 6.5 million Galaxy S3 phones.

Although the company does not release its mobile-phone sales figures, Samsung probably outperformed competitors in the top-end smartphone market, while having a tougher time competing with Chinese brands such as ZTE and Huawei in low-end smartphones, analysts said.

Samsung’s strong result come a few days after Apple reported earnings that fell short of expectations as consumers snapped up cheaper iPhones or delayed purchase in anticipation of a new iPhone model.