Samsung posts best quarterly profit amid chip boom

Janie Parker
July 27, 2017

Samsung Electronics on Thursday reported an 88.9 percent jump in its second quarter net profit, boosted by demand for its memory chips and a rise in smartphone sales as the firm seeks to move on from last year's recall debacle.

Samsung Electronics announced record profits for the quarter ending June on Thursday.

Mobile devices and data are the keys to understanding Samsung's ascent as the new industry leader, even as its de facto chief is jailed, battling corruption charges, and it recovers from a fiasco over Galaxy Note 7 smartphones that had to be axed previous year because they were prone to catch fire.

It said operating profit soared a forecast-beating 72.9 percent from the previous year to 14.07 trillion won ($12.6 billion), compared with consensus forecasts of $10.6 billion for United States titan Apple, which is due to report next week.

Apple, set to launch its 10th-anniversary iPhone this year, is still projected to notch up larger full-year profits than Samsung.

The tech firm's smartphone unit posted 30 trillion won in consolidated revenue and 4 trillion won in operating profit for the second quarter.

Samsung shares ended down 0.08 percent in Seoul.

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The Galaxy S8 series of smartphones recorded higher sales than their predecessors, helping the company's mobile business to rebound from the fire-prone Galaxy Note crisis that cost almost £4 billion a year ago.

It has also been buffeted by a scandal that has seen vice-chairman and heir Lee Jae-Yong charged in connection with the sprawling corruption scandal that brought down South Korean president Park Geun-Hye. Operating profit was up 72.9 percent to KRW 14.07 trillion, in line with the company's preliminary report.

Just as Saudi Arabia dominates in oil output, Samsung leads in manufacturing the high-tech commodity of memory chips, which enable the world to store the data that fuels the digital economy.

Sales of Samsung's displays also rose due to high demand for its OLED panels while its TV sales only increased slightly. Samsung has said it plans to spend $18 billion in the next four years to expand memory chip production capacity at its South Korean plants.

Analysts expect the momentum to continue for the rest of the year, driven by the release of Samsung's next smartphone, the Galaxy Note 8, and sustained demand for memory chips.

Samsung is also upbeat about its business in the second half of the year.

Other reports by TheDailyFarc

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