Samsung expects to break operating profit record in second quarter
Samsung on Friday local Korea time announced financial expectations for the second quarter of 2017, saying sales likely drove a 72 percent increase in operating profit compared to the same time last year.
The Korean tech giant estimates it raked in an operating profit of 14 trillion won ($12.11 billion) for the quarter ending in June, reports Reuters. The performance would mark a new watershed for the company, and beats a 13.1 trillion won average of 19 analyst estimates compiled by the publication.
Samsung expects revenue to be up 18 percent year-over-year at 60 trillion won, again above analyst forecasts of 59 trillion won.
If Samsung's estimates are accurate, the company will enjoy back-to-back record-breaking quarters. For the quarter ending in March, Samsung managed to reach an operating profit of 9.9 trillion won on revenues of 50.55 trillion won.
Although the Apple competitor failed to offer details on what, exactly, is driving profits to such heights, industry watchers believe Samsung's memory chip division is to thank for the continued boost. The company is the world's largest purveyor of memory chips and has profited greatly on a memory "super-cycle" fueled by burgeoning technology like cloud computing and artificial intelligence services.
The report also notes OLED panel sales likely helped push growth to new levels. A portion of those orders is rumored to come from Apple, which is primed to release an OLED-toting "iPhone 8" later this year. According to supply chain rumblings last month, Samsung will produce some 80 million OLED screens for "iPhone 8" in 2017 alone, an order estimated to eat up about half of Samsung's manufacturing capacity.
Recent reports suggest Samsung is investing $21 billion in new OLED production infrastructure, a move that will help bolster output once Apple fully commits to the technology.
Samsung's estimates arrive amidst a string of controversies. Last year, the company's mobile division suffered a $5 billion blow when then-new Galaxy Note 7 units began to catch fire due to what was later established as battery manufacturing flaws. The model was ultimately recalled and discontinued. Later, Samsung head Jay Y. Lee was arrested on allegations of bribery, perjury and embezzlement related to the corrupt activities of impeached South Korean President Park Geun-hye.
Samsung will produce a more detailed overview of its second quarter finances when it reports earnings at the end of July.
The Korean tech giant estimates it raked in an operating profit of 14 trillion won ($12.11 billion) for the quarter ending in June, reports Reuters. The performance would mark a new watershed for the company, and beats a 13.1 trillion won average of 19 analyst estimates compiled by the publication.
Samsung expects revenue to be up 18 percent year-over-year at 60 trillion won, again above analyst forecasts of 59 trillion won.
If Samsung's estimates are accurate, the company will enjoy back-to-back record-breaking quarters. For the quarter ending in March, Samsung managed to reach an operating profit of 9.9 trillion won on revenues of 50.55 trillion won.
Although the Apple competitor failed to offer details on what, exactly, is driving profits to such heights, industry watchers believe Samsung's memory chip division is to thank for the continued boost. The company is the world's largest purveyor of memory chips and has profited greatly on a memory "super-cycle" fueled by burgeoning technology like cloud computing and artificial intelligence services.
The report also notes OLED panel sales likely helped push growth to new levels. A portion of those orders is rumored to come from Apple, which is primed to release an OLED-toting "iPhone 8" later this year. According to supply chain rumblings last month, Samsung will produce some 80 million OLED screens for "iPhone 8" in 2017 alone, an order estimated to eat up about half of Samsung's manufacturing capacity.
Recent reports suggest Samsung is investing $21 billion in new OLED production infrastructure, a move that will help bolster output once Apple fully commits to the technology.
Samsung's estimates arrive amidst a string of controversies. Last year, the company's mobile division suffered a $5 billion blow when then-new Galaxy Note 7 units began to catch fire due to what was later established as battery manufacturing flaws. The model was ultimately recalled and discontinued. Later, Samsung head Jay Y. Lee was arrested on allegations of bribery, perjury and embezzlement related to the corrupt activities of impeached South Korean President Park Geun-hye.
Samsung will produce a more detailed overview of its second quarter finances when it reports earnings at the end of July.
Comments
Samsung Electronics always provides an outlook for their financial statement which is published later that month.
And it's always a range for operating profit and a range for revenue (ai only provided the average), as regulated by SK law.
Although, you're right and I agree with you.
Then you won't have an iPhone or Macbooks.
You HONESTLY think it would be impossible for Apple to make an iPhone or a Macbook without Samsung? Give me a fucking break. Yes, Samsung is a massive supplier, but they didn't exist Apple would simply be using someone else. It's not like Samsung's memory chips, SSD, or anything else give some unique advantage to the iPhone.
That said, your basic point is valid. This quarter - the second calendar quarter and Apple's third fiscal quarter - is typically Apple's weakest. If Samsung does realize more profit this quarter, that will be a big part of the reason why. If Samsung's other income and income taxes for this quarter are typical, then $12 billion in operating profit would mean around $9-1/2 billion in net income. The top of Apple's guidance range suggests $8-1/2 billion in income. So Samsung may realize more profit than Apple this quarter. But $9-1/2 billion would still be less than Apple realized in 8 of its last 10 quarters.
Despite what you want to believe, Apple's superior products are the result of their obtaining superior components. The supply chain? Tim Cook's specialty FOR DECADES. If Apple uses inferior components, then their iPhones and iPads won't be as good. The hardware won't be as good. And the software will even suffer because of the bad hardware. By contrast, Samsung, who will have the best parts BECAUSE THEY MAKE THOSE PARTS THEMSELVES will have a hardware advantage because their hardware will be constructed from better parts. And the hardware advantage will make the software advantage that iOS and iOS apps have over Android and Android apps that much less pronounced. You will have inferior operating system and apps, but running on better hardware versus superior operating system and apps running on inferior hardware. At best it is a wash. But Apple can't afford a wash when the iPhone costs twice as much as some Android devices with similar features. Not Samsung, who actually charges more than Apple for the Galaxy S and Note devices, but, say, Motorola, who charges only $399 for their flagships, and OnePlus who charges $450 for theirs, and Asus who charges about $350, and Huawei who charges about the same.
Apple fans need to realize: Samsung's selling 300 million smartphones a year that cost an average of $250 does not take anything away from Apple's selling 250 million smartphones a year that cost an average of $600. Apple and Samsung benefit from each other's success. Both realize this, and this is why they aren't suing each other anymore. Samsung's success hurts Google more than it hurts Apple. It is because of Samsung's refusal to make and sell Android wearable, IoT and TV devices that the Wear, Brillo (now Things) and TV platforms are such failures. (Well maybe not Android TV, as Sony supports that platform for their smart TVs, and them plus a few other manufacturers means that about half a million Android TV devices get moved a month. Which isn't great, but considering that the competition is Roku, Apple TV and Fire TV, none of which are setting the market on fire either, and it means that they are still in the game.) The market share of Tizen-based smartwatches, appliances and smart TVs dwarfs Google's non-smartphone offerings, just as their Gear VR crushed Google's Cardboard and Daydream. Bixby is going to crush Google Assistant also, because Samsung is going to push it to their smart TVs, smart watches and smart appliances - all running Tizen - in addition to their smartphones when it is ready. And Google can't do a thing about it, because they know that if they lose Samsung, that will be like 60% of the market share of premium Android devices. (LG, HTC, Motorola and Huawei basically combine for the rest, and a lot of those "premium" devices cost much less than an iPhone 7, and cost about the same as an iPhone SE). But enough about that. Samsung is not Apple's enemy. You only have that ridiculous mindset if you resent the fact that Apple has competition at all ... that they don't own like 95% of the smartphone space the way they dominated the (much smaller!) MP3 player industry 10-15 years ago. As it is, Samsung is no real threat to Apple while supplying Apple the best components - and design ideas! - for their own devices. I can't imagine a better situation to be in. Especially since the anti-trust regulators in the US and EU would step in if Apple were any more dominant than they are now, just as they acted against AT&T and Microsoft back in the day, and (the EU at least) are hammering Google right now. That's right ... no Samsung and the DOJ and the EU are shaking down Apple for all the billions they could get their grubby paws on. Would that make you happier just so long as it means that everyone is forced to buy an iPhone whether they want or would benefit from a competing product or not? If that is what you really feel, then you sound like those people from the Wintel PC monopoly from not so long ago. Aren't you choosing good role models to emulate? And even then: you had different manufacturers to choose from: IBM, Lenovo, HP, Dell, Toshiba, Packard Bell etc. so you could pick from any number of configurations. But in you guys' world, your choices would be the iPhone 7, the iPhone 7 Plus and the iPhone SE. Actually no, it would just be the iPhone 7, as it is only due to the need to compete with Samsung and Android that the 7 Plus and SE exist in the first place. Case in point: the need to compete with cheaper Android devices is why the iPad Mini existed. Now that there is no longer any real competition from Android in tablets (Google doesn't even make Pixel or Nexus tablets anymore) the iPad Mini doesn't exist anymore either, and now an entry level iPad costs $350 instead of $225, and the smallest iPad is now 9.7' instead of under 8'.
But hey, you guys are right. Who needs competition with all that consumer choice that it creates? We want uniformity! We want to pay MORE for FEWER features and LESS innovation that would exist in a world without Android, Google and Samsung! One where the only real competition would be Nokia Symbian and Windows 8 devices fighting over 15% market share! Right?
I'll help him him out here. To hide that fact that the record is being driven by chip sales ...
Samsung Electronics Co Ltd (005930.KS) is expected to report its best-ever quarterly profit in the second quarter, with soaring memory chip sales pushing it past Intel Corp (INTC.O) as the biggest semiconductor maker by revenue for the first time.