Samsung Q2 profits up but mobile devices growth slows

Summary:The South Korean electronics giant beat its own estimates, with overall profit rising 47.5 percent year on year, but its mobile division's growth momentum is showing signs of slowing down.

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Samsung Electronics posted another record quarter of profits with Q2 net profits rose 47.5 percent year-on-year but growth of its flagship mobile division are showing signs of a slowdown.

The firm announced on Friday for the quarter ending June, its overall operating profit hit 9.53 trillion won (US$8.5 billion), slightly greater than its own estimate of US$8.3 billion released earlier this month . Its revenue had also rose 20.7 percent year-on-year to a record 57.46 trillion won (US$51 billion) in the second quarter.

Profits from its mobile division had been the South Korean electronics firm's biggest earnings generator, responsible for about two thirds of the company's earnings. It rose 52 percent to 6.28 trillion won (US$5.6 billion) from a year ago.

Samsung attributed this to strong sales of its Galaxy S4 and other mobile devices such as Note 2. As of May 2013, the firm sales of the Galaxy S4 had passed the ten million mark less than a month after it was launched , beating records by Galaxy S3 and S2, which took 50 days and five months respectively.

However, increased marketing costs over the quarter drive operating profit to dip 3.5 percent from the previous three months.

For the same period, Apple reported US$35.3 billion revenue for its quarter ending June 29, 2013 on Tuesday, selling 31.2 million iPhones, 14.6 million iPads, and 3.8 million Macs, but its gross margin fell to 36.9 percent from 42.8 percent last quarter.

Going forward, Samsung expects the smartphone and tablet market to grow under strong seasonality but competition will intensify with new product launches.

Strong performances in chips, display panels

Samsung also said its chip and display panel divisions also saw an improvement in their performances.

Its semiconductor business logged an operating profit of 1.76 trillion won (US$1.58 billion) in the second quarter, compared to 1.03 trillion won (US$925 million) a year before, due to high-margin products.

Its display panel unit's operating profit doubled to 2.92 trillion won (US$2.62 billion), due to strong demand for TV and tablets.

Topics: Hardware, Mobility, Samsung

About

Elly grew up on the adrenaline of crime fiction and it spurred her interest in cybercrime, privacy and the terror on the dark side of IT. At ZDNet Asia, she has made it her mission to warn readers of upcoming security threats, while also covering other tech issues.

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