Samsung has stormed its way through another highly profitable quarter (PDF), breaking its previous best quarterly operating profits set in Q1 by 15%. The company credited the unprecedented demand for its Galaxy S3 smartphone, solid sales of its Galaxy Note device and strong demand for electronics such as TVs.
Revenue came to 47.6 trillion Won ($47.1bn) for the quarter, an increase of 21% year-on-year. The company’s operating profits increased a massive 79% to 6.72 trillion Won ($5.9bn), a 15% increase on its previous best of 5.85 trillion Won set last quarter. The results were in line with its recent guidance, although they were slightly below industry analysts’ estimates.
The divisional breakdown revealed strong performance in the IT and mobile division, boosted by huge demand for its flagship handset, as well as solid sales of its Galaxy Note smartphone, among others. In all, its mobile business accounted for 60% of its earnings for the period, and almost doubled when compared year-on-year.
Its display panel division beat analyst predictions, reporting sales of 8.25 trillion Won ($7.25bn), a 16% increase year-on-year, thanks to strong sales of “value-added products” like 3D and LED TVs.
"Solid results from the TV division show its resilience to the euro zone crisis, while the mobile division has become a strong cash cow on the back of strong Galaxy sales," said Seo Won-seok, an analyst at Korea Investment & Securities.
Despite the impressive results however, its semiconductor business continued to struggle with a 6% decline year-on-year due to weak demand for its NAND flash memory and computer memory chips. Samsung blamed the weak demand of PC memory chips and oversupply in NAND chips used in smartphones and flash drives.
"Weak memory chip prices remain the biggest concern for Samsung in the third quarter, but it will again fare better than rivals as its reliance on Apple, which tends to squeeze suppliers quite a bit, is small compared to the likes of Hynix and Toshiba. It'll have less margin pressure," Won-seok added.
Samsung said that mobile sales would continue momentum throughout the third quarter, with new models at “diverse price ranges to be released” during the period. Analysts estimate the phone maker’s Galaxy SIII sales will peak ahead of the iPhone 5 launch and hit around 15-20 million units during the next quarter.
The Galaxy S III is the third generation of the Samsung's S smartphones family. It features a 4.8-inch HD Super AMOLED display featuring 720p resolution and a 306ppi pixel density. Also you can find an 8 megapixel camera, LED flash, an user replaceable 2100mAh battery, micro-SIM slot, and microSD card slot for storage expansion.
The Samsung Galaxy Note measures 147mm (5.78in) tall and 83mm (3.27in) across, which means that it feels absolutely massive when held in the hand. However, despite its large dimensions, the Note remains very thin at only 9.7mm (0.38in) thick. Samsung has equipped the Galaxy Note with impressive internal hardware: a 1.5GHz dual-core processor, 1GB of RAM, and 16GB of internal storage (with just under 13GB available to the user). It comes with Android 2.3.6 Gingerbread and Samsung's TouchWiz interface.
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