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(LEAD) Samsung's operating profit up 5.19 pct in Q2

All Headlines 09:08 July 06, 2018

(ATTN: RECASTS lead; ADDS details throughout, photo)
By Kang Yoon-seung

SEOUL, July 6 (Yonhap) -- Samsung Electronics Co. said Friday its second-quarter operating profit advanced 5.19 percent from a year earlier, but it failed to post record-breaking earnings apparently due to weaker-than-expected smartphone sales.

Operating profit for the three-month period came to 14.8 trillion won (US$13.2 billion), compared with 14.07 trillion won reported a year earlier, the company said in its earnings guidance report.

Sales came to 58 trillion won, down 4.92 percent on-year.

The second-quarter operating profit was below the market's estimate of 15.2 trillion won, according to the data compiled by Yonhap Infomax, the financial arm of Yonhap News Agency, on 21 brokerage houses.

Despite the on-year increase, the latest operating-profit estimate fell shy of the record high figure of 15.6 trillion won tallied for the January-March period of this year.

Samsung did not offer performance and net profit estimate reports for each business division. The company will deliver its finalized earnings report later this month.

It marked the first time in seven quarters for the company to post an on-quarter decrease in terms of operating profits.

Accordingly, the operating profit-to-sales ratio stood at 25.5 percent, down 0.3 percentage point from an earlier three-month period.

Analysts said the on-year improvement was mostly attributable to the chip segment, while the weak sales of the Galaxy S9 probably weighed down further growth.

"Although the smartphone business did not meet expectations, the chip arm's performance was strong (over the second quarter)," said Park Won-jae, a researcher at Mirae Asset Daewoo Research, claiming that foreign-exchange conditions were also advantageous for Samsung.

Mirae Asset Daewoo Research estimated the operating profit for the crucial chip business at 12.6 trillion won, followed by the IT and mobile division at 2.6 trillion won. It also suggested 500 billion won and 100 billion won for the consumer electronics and display arms, respectively.

Samsung Electronics posted an operating profit of 8 trillion won for the semiconductor business in the second quarter of 2017, along with 4 trillion won in the IT and mobile business.

Shares of Samsung Electronics fell 0.65 percent to close at 45,950 won Thursday. The guidance report was released before the market opened Friday.

Samsung Electronics' production plant in Giheung, south of Seoul (Yonhap)


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