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Samsung Hits Record Profit in Q2

July 26, 2013
Profit increase 49.7% on high sales of Galaxy S smartphones.

SEOUL -- Samsung Electronics (IW 1000/15), the world's largest technology firm by revenue, on Friday posted another record quarterly net profit, but weakening earnings momentum has fuelled fears over flagging demand for high-end smartphones.

The South Korean giant said its April-June net profit surged 49.7% year-on-year to 7.77 trillion won (US$6.96 billion) thanks to robust shipments of its flagship Galaxy S smartphones and higher chip prices.

Second-quarter operating profit surged 47.5% on-year to 9.53 trillion won in the same period as sales grew 20.7% on-year to 57.46 trillion won.

For Samsung the IT and mobile sector contributed most of the second-quarter operating profit, producing 6.28 trillion won, up 52% from a year earlier.

Semiconductors saw a 1.76 trillion won operating profit, up 71% from a year earlier, while operating profit from displays surged 58% year-on-year to 1.12 trillion won.

The figures were in line with the firm's forecast at the start of the month, although they were well short of expectations, which had been for an operating profit of 10 trillion won.

"Entering into a typically strong season for the IT industry, we expect earnings to continue to increase," said Robert Yi, Senior Vice President and Head of Investor Relations.

But he warned: "We cannot overlook delayed economic recovery in Europe and risks from increased competition for smartphone and other set products."

However, Samsung's share price has been falling-- wiping about $30 billion off the firm's value -- since late April when the flagship Galaxy S4 hit stores, as sales have not been as high as hoped.That is despite the company spending billions of dollars on a global marketing campaign, squeezing margins, after launching the latest gadget at a lavish New York event in late March.

Samsung did not reveal smartphone shipments but it is thought to have sold about 75 million in the past quarter, including around 20 million Galaxy S4s.

But while that helped Samsung maintain its status as the world's largest handset maker, the figure is only slightly up from the estimated 70 million shifted in the previous three months, suggesting a slowdown in growth momentum.

That compares with Apple, which sold 31.2 million iPhones in April-June -- a record for the quarter -- compared with 37.4 million in the previous three months, according to research firm Strategy Analytics.

Copyright Agence France-Presse, 2013

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