Galaxy Gains: Samsung Gives Strong Earnings Guidance For Q2

Samsung's big Galaxy quest is appearing to pay off.

South Korea-based Samsung Electronics on Thursday reported that its earnings for the second quarter of the year are expected to be ahead of analyst projections. The guidance points to operating profit of 8.1 trillion Korean Won - about $7.01 billion - for the company, up 17.3 percent from the same period a year earlier.

That would make Q2 the most profitable quarter for Samsung in more than two years, since the first quarter of 2014.

[Related: Review: Samsung S7 Active Withstands Water, Drops And General Clumsiness]

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While Samsung didn't go into details in its guidance announcement about the factors behind the surge in profits, analysts told Reuters this week that huge sales of Samsung's Galaxy S7 smartphone have been behind the growth.

The growth is somewhat of a surprise in the smartphone market, which on the whole has been sluggish. Market tracker IDC reported that global sales of smartphones were flat during the first quarter of 2016 compared to the same period a year earlier. The main culprit, according to IDC, has been "strong smartphone saturation" in developed markets.

The good news for Samsung also comes a few days after a report from Digitimes that suggested Apple is cutting the prices it’s paying iPhone component suppliers, as a result of weakening demand. Apple, according to Digitimes, has issued a ’demand’ for price cuts to suppliers including Largan Precision and Foxconn Electronics.

Apple is also looking for new suppliers that might help the tech giant to keep its profit margins as high as possible, according to the report. Meanwhile, an analyst at Pacific Crest wrote that he expects a ’disappointing’ reception for the upcoming iPhone 7 as he downgraded Apple suppliers Cirrus Logic and Skyworks Solutions.

Meanwhile, Samsung has revealed plans to keep up its momentum in the smartphone game. The company just disclosed patents for a new type of smartphone that has two displays, which are connected without the assistance of a hinge. The displays aren’t necessarily aimed at entertainment uses, according to Patently Mobile, but instead are more likely meant to serve professionals that would be looking to use the device for note taking (using a digital pen).