South Korea's Samsung breaks sales, profit records

Tomas Mccoy
July 27, 2017

Analysts forecast 10.1 trillion won in net profit according to financial data provider FactSet.

The South Korean electronics giant said Thursday that it posted 61 trillion won ($ 54 billion) in sales and 14 trillion won in operating profit in the April-June period, rising 19 percent and 72 percent, respectively, from the previous year.

Apple, set to launch its 10th-anniversary iPhone this year, is still projected to notch up larger full-year profits than Samsung.

This strong demand did lead to Samsung paying higher component costs but there was still a large increase in the earnings of its mobile division thanks to the release of the new Galaxy S8 and S8+.

"But we also have to keep in mind that a lot of Samsung's momentum is from memory and displays too, so it's not all about the S8, either", he said, according to Bloomberg News.

It has also been buffeted by a scandal that has seen vice-chairman and heir Lee Jae-Yong charged in connection with the sprawling corruption scandal that brought down South Korean president Park Geun-Hye.

The home entertainment unit's operating profit improved 8.1 percent during the same period to 343 billion won while the revenue dropped by 3.8 percent. Samsung provides its chips to other companies including Apple. Samsung has said it plans to spend $18 billion in the next four years to expand memory chip production capacity at its South Korean plants.

"The company's strategic model going against Apple Inc's iPhone 8 and Samsung Electronics' Galaxy Note 8 in the second half of 2017 is expected to fall short, making it hard for mobile revenue growth".

Samsung said the semiconductor business was driven by strong demand for server memory and SSD storage while industry supply is limited, and expects demand to continue for the rest of the year.

On an annual basis, Samsung's semiconductor division is widely expected to overtake Intel's sales this year, analysts at brokerages and market research firms say. He added that the S8's success puts the problem of the exploding Note 7 to bed.

Other reports by VideoGamingPros

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