Samsung Again Reports Record Quarterly Profit


Samsung Friday reported another record quarterly profit, as sales of its Android-based Galaxy smartphones continue to soar.

The Korean tech giant reported second-quarter revenue of $42.7 billion, a 21 percent jump year-over-year, along with quarterly operating profit of $5.9 billion, representing an even greater jump of 79 percent compared to the same quarter last year.

Samsung's Mobile Communications business was by far the biggest driver of growth. Its handset unit alone, which encompasses its full line of Galaxy smartphones along with its half-smartphone, half-tablet Galaxy Note device, saw earnings jump 75 percent year-over-year.

[Related: Samsung Buys U.K. Firm To Bolster Mobile Chip Business]

"While we only the launched the Galaxy S III in late May, the sales have been very strong, making a major contribution to our second-quarter results," said Hyunjoon Kim, vice president of Samsung's Mobile Communications business, during an earnings call with investors Friday.

Samsung sold 10 million units of its new Galaxy S III during the first two months it was on the market, with new features such as near-field communication and voice-activation fueling its adoption. Mobile research firm Juniper Research reported this week that Samsung's second-quarter smartphone sales trumped Apple's, totaling 52.1 million units. Apple sold less than half this figure, shipping 26 million iPhones.

Juniper Research did note, however, that the lull in Apple's smartphone sales is most likely temporary, resulting from customers' anticipation of Apple's fifth-generation iPhone launching this fall.

Meanwhile, Samsung and Apple are in the midst of a global legal war, a battle that began last year when Apple said Samsung's Galaxy smartphones and tablets were "slavish copies" of its own iPhone and iPad. Apple recently won a preliminary injunction banning U.S. sales of Samsung's Galaxy Tab 10.1 device, claiming it's based on an iPad-specific design patent, and the two tech giants are slated to go to court next week.

Samsung's Visual Display business also contributed to the company's record profits, particularly strong sales of its TVs in both developed and emerging markets. Revenue for this division accounted for $7.5 billion.

The only business segment that saw a profit decrease was Samsung's semiconductor unit, which posted a 6 percent year-on-year decline in sales. Myungho Kim, vice president of Samsung's semiconductor business, attributed the drop to weak global sales of PC DRAM chips, due to pent-up interest in Microsoft's upcoming Windows 8 OS.

Other chip makers including AMD and Intel reported similarly sluggish sales this month, as PC sales continue to wane and more and more consumers turn to mobile devices such as tablets and smartphones.

Looking to the second half of its fiscal year, Samsung said it anticipates lackluster sales of PCs and related chip products to continue but projected some of this will be offset by the ongoing success of its TV, display and mobile handset businesses.

PUBLISHED JULY 27, 2012