Phones drive Samsung to record profit

Samsung, the world's largest technology firm by revenue, has reported a record quarterly profit as customers snapped up Galaxy smartphones.

Samsung said on Friday its net profit reached 5.2 trillion won ($US4.5 billion) in the three months ending in June, a 48 per cent jump from a year earlier.

But the bottom line was lower than a median market consensus of 5.6 trillion won based on a poll of seven analysts by Yonhap Infomax.

Its second-quarter operating profit spiked 79 per cent over a year earlier to 6.7 trillion won and its revenue rose 21 per cent to 47.6 trillion won, matching Samsung's guidance released earlier this month.

The operating profit, also at an all-time high, marked a 15 per cent rise from the previous quarter.

Shares of Samsung opened 1.9 per cent higher in Seoul after the quarterly financial results announcement.

Samsung benefited from runaway demand for its Android-powered smartphones.

Despite nagging worries about Europe, analysts are expecting Samsung to renew its record-high profit in the third quarter when Galaxy S3 sales are expected to peak before Apple unveils its new iPhone, largely anticipated in October.

In the second quarter, Samsung's mobile business contributed 63 per cent of operating profit by generating 4.2 trillion won. Analysts estimate Samsung sold around 50 million smartphones in the second quarter, including about 6.5 million Galaxy S3 phones.

Although the company does not release its mobile-phone sales figures, Samsung probably outperformed competitors in the top-end smartphone segment, while having a tougher time competing with Chinese brands such as ZTE and Huawei in the low-end smartphone markets, analysts said.

Samsung's stellar results come a few days after Apple made a rare miss in its quarterly earnings, as consumers snapped up cheaper iPhones or delayed purchase in anticipation of a new iPhone model.

Apple said it sold 26 million iPhones, up 28 per cent from a year earlier.

The two companies are scheduled to meet on July 30 at a San Jose court for a US trial on mobile patents.

Started in April 2010 when Apple accused the South Korean firm of copying its iPhone and iPad designs, the epic legal fights have expanded to about a dozen lawsuits in North America, Asia and Europe.

Samsung has accused Apple of violating its wireless technology patent.

Outside the courtroom the two companies, which control more than half of the world's smartphone market, have a close business relationship.

Samsung is a key supplier of mobile processors for Apple's iPhone and iPad and Samsung's component divisions also make display screens and mobile chips for Apple.

Outside the mobile market, Samsung made improvements in flat-screen and TVs but semiconductor profit declined on weak global demand for personal computers.

Samsung's semiconductor division earned 1.1 trillion won in operating profit in the second quarter, compared with 1.8 trillion won a year earlier.

The company said the recovery in demand for PC DRAM chips would be weaker than expected in the third quarter.

Its flat-screen division generated 750 billion won in profit as prices of liquid crystal display panels stabilised. It expects higher demand for TV panels for the rest of the year.

The division that makes televisions and home appliances made 760 billion won in operating profit, a 66 per cent rise from a year earlier, as sales of high-end TVs rose in developed and emerging markets.

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