Samsung posts record $8.5B profit as mobile business shrinks
Operating profit jumps 47 percent over a year ago, but profit from the South Korean electronics giant's mobile division declined 3.5 percent from the previous quarter.
Samsung on Thursday posted another company record quarterly operating profit that was marred by a slight recession in its mobile business.
The South Korean electronics giant's second-quarter operating profit for the period ended June 30 was 9.53 trillion won ($8.5 billion), an increase of 47 percent over a year ago, the company announced in a statement. Though the results were in line with company guidance issued earlier this month, analysts had been expecting an operating profit of 10.1 trillion won ($8.8 billion).
However, operating profit from Samsung's mobile division, which accounts for two-thirds of its revenue, rose 52 percent to 6.28 trillion won ($5.6 billion) from a year ago but declined 3.5 percent from the previous quarter.
Samsung, which released the GS4 in April, boasted in May of having sold more than 10 million units to retailers and wireless operators less than a month after the handset's debut. However, worries that the company's flagship smartphone was nearing market saturation led more than a dozen analysts to cut their earnings projections for the smartphone maker last month.
Samsung said it expects smartphone sales to be strong in the third quarter but at a slower pace.
"Entering into a typically strong season for the IT industry, we expect earnings to continue to increase," Robert Yi, head of investor relations at Samsung, said in a statement. "However, we cannot overlook delayed economic recovery in Europe and risks from increased competition for smartphone and other set products."
Before a slight decline in the first quarter, Samsung had posted a string of five consecutive quarters of record profits.
Apple, Samsung's chief rival in the mobile industry, also experienced a slowdown in the smartphone market last quarter. On Tuesday, Apple revealed that itin its fiscal third quarter, a solid achievement compared with the 26 million units it sold in the year-ago quarter but a decline from the second quarter of the year, when Apple shipped 37.4 million of its smartphones.
Samsung's semiconductor unit posted an operating profit of 1.76 trillion won ($1.6 billion), compared with 1.03 trillion won ($900 million) a year earlier. Operating profit in its display unit jumped 57 percent to 1.12 trillion won ($1 billion), while profits in its consumer-electronics division fell 41 percent to 430 billion won ($390 million).