OEM posts profit of $8.54 billion, a 47.5 percent increase.
Economic Times reports that Samsung’s operating profit for the April to June period reached $8.54 billion (€6.44 billion), despite a 3.5 percent fall in profit for its mobile division compared to the previous quarter, with the company announcing a $1 billion (€754 million) increase in investment.
While the smartphone market in which Samsung is a dominating brand slows, the OEM’s mobile division profit, which makes up two-thirds of its total earnings, is still 52 percent higher than a year ago, although fell below expectations for 2Q13.
Ahn Young-hoe a Fund Manager at KTB Asset Management which owns Samsung shares, said: “It is clear that the global smartphone market is stalling because of the slowing growth of high-end smartphones and rising competition from lower-priced smartphones […] there is no major momentum for Samsung. The key is whether Samsung, which sources smartphone parts in-house unlike Apple, will be able to cut parts costs and increase volume and market share to offset reduced smartphone margins.”
The second quarter’s strong earnings were in part due to the company’s component business as prices for semiconductors used in PCs and mobile devices soared. Samsung also plans to invest more this year in chips and flat panels, with 80 percent of its increased investment budget expected to be dedicated to this. The OEM said that profits from its chip business increased 71 percent to 1.76 trillion won ($1.6 billion/€1.2 billion) during 2Q13.