Sam­sung profit tops es­ti­mates on S7

China Daily (USA) - - BUSINESS - By BLOOMBERG

Sam­sung Elec­tron­ics Co re­ported sec­ond-quar­ter profit that beat an­a­lysts’ es­ti­mates, fu­eled by stronger sales of Galaxy S7 smart­phones and ag­gres­sive cost cuts.

Net in­come, ex­clud­ing mi­nor­ity in­ter­ests, was 5.83 tril­lion won ($5.1 bil­lion) in the pe­riod, the Su­won, South Korea-based com­pany said in a fil­ing on Thurs­day.

That com­pared with the 5.64 tril­lion won av­er­age of es­ti­mates com­piled by Bloomberg. The com­pany also an­nounced a 1.79 tril­lion won share buy­back, the fi­nal stage of a plan an­nounced last year.

Sam­sung has ben­e­fited from slug­gish sales of iPhones as US wire­less car­ri­ers pro­moted the Galaxy S7 for high-end con­sumers, help­ing re­duce mar­ket­ing ex­penses. That could change in the sec­ond half as the com­pany faces new mod­els from Ap­ple Inc.

Lower prices for semi­con­duc­tors and dis­plays have also helped sales of the com­pany’s other con­sumer elec­tron­ics.

“The smart­phone and TV di­vi­sions led the earn­ings sur­prise for the quar­ter,” said Greg Roh, an an­a­lyst at HMC In­vest­ment Se­cu­ri­ties in Seoul.

“Sam­sung did well in the first half, but it’s a mat­ter of how well it could de­fend it­self from the over­all down­side risks in the sec­ond half.”

Shares of Sam­sung fell 1.3 per­cent to 1,507,000 won at the close of trade. The stock has gained 20 per­cent this year af­ter three straight an­nual de­clines.

“We will be im­ple­ment­ing very ac­tive mar­ket­ing ac­tiv­i­ties in the sec­ond half to drive up ac­tual pur­chases and through this, we plan to con­tinue to main­tain over­all sales of our pre­mium hand­sets,” Lee Kyeong-tae, vice-pres­i­dent of the mo­bile com­mu­ni­ca­tions busi­ness, told a con­fer­ence call.

Sam­sung will un­veil its next-gen­er­a­tion Note de­vice with larger dis­plays on Aug 2 in New York, Brazil and in Greg Roh, Lon­don, the com­pany said. While the com­pany is fi­nal­iz­ing its cap­i­tal spend­ing plans, it ex­pects a slight in­crease from the year ear­lier.

Rev­enue was 50.9 tril­lion won in the sec­ond quar­ter, slightly higher than the 50 tril­lion won of its July 7 pre­lim­i­nary earn­ings an­nounce­ment.

Sam­sung’s earn­ings came the same day that June quar­ter data on the global mar­ket were re­leased, show­ing the fastest growth com­ing from Chi­nese ven­dors. Sam­sung main­tained its global lead­er­ship and shipped 3.4 per­cent more smart­phones, while those at fourth-ranked Oppo Elec­tron­ics Corp more than dou­bled and fifth­placed vivo Mo­bile Com­mu­ni­ca­tion Tech­nol­ogy Co Ltd jumped 62 per­cent, ac­cord­ing to data from Coun­ter­point Re­search.

Re­search com­pany Canalys said the world­wide smart­phone mar­ket grew mod­estly in the sec­ond quar­ter af­ter a dis­ap­point­ing first quar­ter.

Global ship­ments reached over 330 mil­lion units, with Sam­sung lead­ing the mar­ket with ship­mentsaround80mil­lion units.

It said Ap­ple shipped 40 mil­lion iPhones in the quar­ter, a sec­ond con­sec­u­tive an­nual de­cline in ship­ments. In third place, Huawei Tech­nolo­gies Co’s ship­ments in­creased to 31 mil­lion on the back of record ship­ments in China and con­tin­ued growth in Europe, the Mid­dle East and Africa.

The smart­phone and TV di­vi­sions led the earn­ings sur­prise for the quar­ter.” an an­a­lyst at HMC In­vest­ment Se­cu­ri­ties in Seou

AFP

Vis­i­tors test Sam­sung Galaxy S7 edge smart­phones at its show­room in Seoul.

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