Net profit of Samsung in April-June surged by 89%

James Marshall
July 28, 2017

The South Korean tech giant said its earnings blew past its previous record quarterly net profit of 8.24 trillion won - jumping to 11.05 trillion South Korean won ($9.9 billion) for the three months ended June 30, an 89% rise from 5.85 trillion won for the same period a year earlier. - which came almost four years ago as booming smartphone sales drove growth said The Journal.

Samsung said its semiconductor business recorded 8 trillion ($7.2 billion) in operating income on revenue of 17.6 trillion won ($15.8 billion) during the April-June period.

Samsung said the chip business is anticipated to maintain robust earnings down the road on rising demand from server and mobile products. Operating profit at the division fell to KRW 4.06 trillion from KRW 4.32 trillion a year ago.

Samsung pulled in 61 trillion won ($54.8 billion) in revenue and 14 trillion won ($12.6 billion) in profit for the three months ending June 31.

Almost 60% of Samsung's quarterly income was generated by its semiconductor division, which booked eight trillion won in operating income on sales of 17.6 trillion won. That has brought about a supply shortage which is pushing prices even higher and widening profit margins.

"Although the capex plan for 2017 has not been finalized, the annual capex is expected to be significantly higher than the previous year", the company said Thursday in a press release confirming record-high income statement for the second quarter.

Another victor was the display panel unit, which saw operating profit jump twelvefold to 1.7 trillion won, topping 1 trillion won for the fourth consecutive quarter.

Samsung's share price closed down 0.1 percent, versus a 0.4 percent rise in the Kospi benchmark index. That's not the division where most of the profit originated, though, but rather Samsung logged a stellar quarter because of growing demand for its memory chips, OLED display panels, and other humble components it has been building capacity for in the last decade or so.

The company said it saw increased global sales of its flagship Galaxy S8 handset, while its middle and low-end smartphone sales declined.

Intel is due to report its earnings later on Thursday.

Looking ahead, Samsung said its third quarter profit may take a hit from marketing expenses from its upcoming launch in its new Galaxy Note series smartphone.

Memory chip makers are enjoying a so-called super-cycle where increasing demand for more sophisticated devices, such as cloud-computing data center servers, requires higher numbers of more expensive chips. Price changes in panels, however, led to a weakened profitability. It also announced the cancellation of KRW 2 trillion worth of its own shares.

Samsung's record earning come as the firm's Vice Chairman Jay Y. Lee is in detention while on trial for his alleged role in a corruption scandal involving South Korea's former president Park Geun-hye.

Other reports by Click Lancashire

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