Samsung's Q2 net income hits record $13b

Samsung Electronics' stellar earnings have put it on course to better Apple's quarterly profits, as it seeks to move past a bribery scandal and a recall debacle.
Samsung Electronics' stellar earnings have put it on course to better Apple's quarterly profits, as it seeks to move past a bribery scandal and a recall debacle.PHOTO: AGENCE FRANCE-PRESSE

SEOUL • Samsung Electronics' quarterly profit and revenue topped analysts' estimates, fuelled by the success of its new Galaxy S8 smartphones and demand for semiconductors.

Net income rose to a record 10.8 trillion won (S$13.1 billion) in the three months ended June, the company said in a filing yesterday, exceeding the 9.75 trillion won average of projections compiled by Bloomberg. Sales rose 20 per cent to 61 trillion won.

The record-breaking earnings have put it on course to better rival Apple's quarterly profits, as Samsung seeks to move past a bribery scandal and a recall debacle.

The firm said huge sales of its new Galaxy S8 smartphone and demand for its memory chips were behind the jump in April-June and predicted another blockbuster report for the current quarter to September.

Samsung said in a statement yesterday: "Looking ahead to the third quarter, the company expects favourable semiconductor conditions to continue... although overall earnings may slightly decline quarter on quarter, as earnings weaken for the display panel and mobile businesses."

The semiconductor business raked in 8.03 trillion won in operating profit in the second quarter, up 204 per cent from the previous year. Samsung provides its chips to other companies, including Apple.

"The components businesses drove significant earnings growth... thanks primarily to strong memory demand for high-density DRAMs and SSDs for servers," the company said.

This month, the firm said it will invest 20.4 trillion won by 2021 to expand and upgrade its chip plants in the South Korean cities of Pyeongtaek and Hwaseong.

"The S8 has indeed helped get Samsung back onto its feet, hopefully putting the Note7 debacle behind it," said Mr Bryan Ma, a technology industry analyst at market intelligence provider IDC, before the announcement.

"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.

Samsung shares ended down 0.08 per cent in Seoul.

BLOOMBERG, AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on July 28, 2017, with the headline 'Samsung's Q2 net income hits record $13b'. Print Edition | Subscribe