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July 29, 2012

Galaxy S3 sales boost Samsung’s Q2 revenue

Robust sales of smartphones such as the company’s flagship Galaxy S3, offset a tumble in other consumer electronics sectors, such as televisions and personal computers.

By CBR Staff Writer

Samsung Electronics posted a 21% jump in revenue to KRW47.6 trillion ($41.6bn) for the second quarter, driven by sales of its high-end smartphones.

For the quarter, the company’s operating profit reached a record KRW6.72 trillion ($5.9bn), representing a 79% increase over the previous year.

The South Korean firm posted solid sales and maintained its profit streak in the April-June quarter across all business segments, excluding semiconductors, amid lingering global business uncertainties.

Samsung Electronics Investor Relations head and senior vice president Robert Yi said as the company moves into the second half, continued fiscal instability in Europe and its effect on the global economy will result in the possibility of a slower-than-expected recovery and intensified market competition.

"Samsung will enhance the competitiveness of our main businesses and reinforce our value-added, differentiated products as a means to improve earnings," Yi added.

Digital Media & Communications, comprising the Consumer Electronics and IT & Mobile Communications business sectors, accounted for KRW36.57 trillion ($32bn) in sales, up 37%.

By business unit, the Mobile Communications Business was one of the leading growth drivers in the June quarter with KRW20.52 trillion ($18bn) in revenue.

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With the successful launch of this year’s flagship GALAXY S III smartphone and robust GALAXY Note sales, the handset unit saw earnings jump by 75% from a year earlier.

The Visual Display Business also contributed to earnings gains with its diverse portfolio of TV models for both developed and emerging markets with KRW8.58 trillion ($7.5bn) in revenue for the quarter.

While operating profit for the Display Panel segment registered an on-year increase, the Semiconductor Business saw profits drop by 38% compared with the same period last year.

Its semiconductor segment, including the Memory and System LSI businesses, posted an operating profit of KRW1.11 trillion ($975m) on revenue of KRW8.6 trillion ($7.6bn) for the quarter, which equates to a 6% decline in sales.

The Display Panel segment recorded an operating profit of KRW750bn ($658.5m) on revenue of KRW8.25 trillion ($7bn), which amounts to a KRW470bn ($413m)increase in profit from the previous quarter and a 16% increase in sales compared to the same period last year.

The Consumer Electronics Division, encompassing the Visual Display and Digital Appliances businesses posted revenue of KRW12.15 trillion ($10.7bn) for the second quarter, a 7% increase year-on-year.

Samsung saw an increase in LED TV sales from the mid 60% range to a mid 80% share, quarter-on-quarter.

For the IT panel sector, the continuation of weak demand for panels used in notebook PCs and monitors was offset by strong demand for tablet PC panels.

The company said the smartphone market will continue to be profitable as consumers are given a wider choice of new products while orders from emerging markets increase.

In the third quarter, Samsung expects to further strengthen its leadership in the high-end smartphone market with the sales of GALAXY S III and also in the LTE equipment business with new devices.

Overall, the company expects the third quarter to be marginally positive as demand for consumer electronics goods, including smartphones and tablets, remains strong and a stream of new products hit the market.

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