Samsung Electronics’ profitability slumped in the second quarter as strong performance in fast-growing smartphones could not overcome weakness in LCDs.
Operating profit for the three months that ended June 30 will fall to between 3.5 trillion won and 3.9 trillion won (US$3.29 billion and US$3.66 billion) from 5.01 trillion won a year earlier, Samsung said in a statement.
Consolidated revenue for the period is expected at between 38 trillion won and 40 trillion won. The company recorded sales of 37.89 trillion won in the same period last year.
PHOTO: BLOOMBERG
Samsung Electronics Co will release a full earnings report including net profit on July 29, when it will provide reasons for the performance, spokesman Nam Ki-yung said.
Suwon, South Korea-based Samsung is a major force in the global electronics industry and the world’s largest manufacturer of memory chips, LCDs and flat-screen TVs. It ranks No. 2 in mobile phones behind Nokia Corp of Finland.
Lee Min-hee, an analyst at Dongbu Securities in Seoul, said that the company again suffered from weakness in its display division, which he expects to record a net loss during the quarter on the back of similar red ink in the first three months of the year.
The bright spot for the company was clearly smartphones.
“Samsung’s smartphone sales were very strong in the second quarter,” Lee said, adding that the company sold 19 million of the devices, up sharply from 3.2 million the year before.
Samsung does not release net profit forecasts. Operating profit is seen as a direct indicator of business performance before taxes, dividends, asset sales and other items that are figured into net profit or loss.
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