Samsung Electronics Recorded Positive Earnings Surprise in Q2

Samsung Electronics announced on July 7 that its sales and operating profit for the second quarter of this year are estimated at 50 trillion won (US$43.47 billion) and 8.1 trillion won (US$7.04 billion), respectively. The quarterly operating profit exceeding eight trillion won is for the first time in nine quarters. The amounts increased by 3.0% and 17.39% from a year ago and by 0.3% and 21.26% from a quarter ago.

Samsung Electronics’ operating profit had reached as high as 10.16 trillion won (US$8.83 billion) in the third quarter of 2013. However, it began to fall in the first quarter of the following year and dropped to 4.06 trillion won (US$3.53 billion) in the third quarter of 2014. It has risen since then, breaking the eight trillion won mark at this time.

Its profit-to-sales ratio for the second quarter of 2016 is estimated at 16.2%. This percentage is the second-highest in the history of Samsung Electronics, second only to the 17.2% recorded in the third quarter of 2013. The ratio was 13.4% from January to March this year.

Such a positive performance can be attributed to the Galaxy S7 flagship smartphone, which recorded a sales volume of approximately 16 million units in the second quarter alone, and the Consumer Electronics Division’s efforts for profitability improvement. According to estimates, the IT & Mobile, Device Solutions and Consumer Electronics Divisions posted 4.5 trillion won (US$3.91 billion), 2.6 trillion won (US$2.26 billion), and 1 trillion won (US$869.5 million) or so in operating profit, respectively.

Under the circumstances, Samsung Electronics’ operating profit for the first half of 2016 is estimated at 14.78 trillion won, about two trillion won more than that of the first half of last year.