Samsung Electronics, the world’s top technology firm by revenue, reported on Friday a record operating profit of $5.9 billion for the June quarter, as rampant Galaxy S handset sales helped stretch its lead over Apple Inc.
September quarter mobile profits are expected to forge further ahead as the latest Galaxy model enjoys a sales boom before the next iPhone launch, widely expected in October, driving Samsung’s profit to a record of nearly 8 trillion won ($7 billion). The mobile business brings in around 60 percent of Samsung’s earnings. Profits of the handset division more than doubled from a year earlier and the flat-screen business swung to a profit as LCD prices stabilized.
Shares in Samsung, which also makes TVs and other appliances, flat-screens, and chips, jumped as much as 4.7 percent to a five-week high after the results, outperforming the wider market.
JK Shin, head of Samsung’s telecoms business, told Reuters on Sunday that sales of the Galaxy S III, the most aggressive competitor to the iPhone, were better than his initial forecast of at least 10 million units in the first two months after its launch in late May. It is also preparing a sequel to the popular phone-cum-tablet Galaxy Note later this year to counter Apple’s new product releases.
Samsung, which earlier this year ended Nokia’s 14-year reign as the top global handset maker, is estimated to have increased smartphone shipments to 50.5 million in the June quarter, nearly double the 26 million iPhones sold.
While the next iPhone will likely slow Samsung’s handset earnings growth, it will boost the Korean firm’s semiconductor earnings as Samsung is the sole producer of processing chips used to power the iPhone and iPad, and also supplies Apple with mobile memory chips, NAND flash and display screens.