Samsung Electronics, the world’s largest smartphone maker, reported its largest-ever quarterly earnings Friday, but a slowdown in growth momentum fueled fears of market saturation for high-end handsets.
The Korean IT giant said its second-quarter operating profit surged 47.5 percent from a year ago to 9.35 trillion won ($8.4 billion), while sales during the April-June period reached 57.46 trillion won, a 20.73 percent rise.
But the record figures that fell short of analysts’ estimates were dampened by the quarterly performance of its mobile business, the biggest earnings generator, which shrank 3.5 percent in the second period.
Samsung said profits at its mobile division jumped 52 percent to 6.28 trillion won from a year ago, but fell 3.5 percent from the previous quarter.
Adding to their pressure is the fact that the April-June reporting period included the launch of its flagship Galaxy S4 in April, for which Samsung expended considerable marketing resources.
“Entering into a typically strong season for the IT industry, we expect earnings to continue to increase,” said Samsung in a statement.
“However, we cannot overlook delayed economic recovery in Europe and risks from increased competition for smartphones and other products.”
Industry watchers have warned that increased competition, saturation in key markets and low-cost smartphone devices from China are negatively affecting Samsung’s growth.
But many predict the Suwon, Gyeonggi Province-based company to achieve a quarterly profit passing the 10 trillion won mark in the third quarter for the first time in any industry here.
The mobile business is still strong, while the memory chip division shows some positive signs of recovery.
The world’s biggest maker of memory chips said profits from the chip business rose 71 percent to 1.76 trillion won on the back of soaring prices for semiconductors used in computers and mobile devices.
On Friday, Samsung also said it plans to allocate 24 trillion won for new facility investment this year, including 13 trillion won for semiconductors and 6.5 trillion won for display panels.
By Lee Ji-yoon
(jylee@heraldcorp.com)
