The mobile division reported a slight decrease in revenue, but still stronger operating profits – $3.84 billion, which is around $382 million more than last year's second quarter. Profitability on lower-end models also improved.
In the third quarter, the South Korean company expects that the release of a new large-screen flagship smartphone will help maintain sales of high-end smartphone portfolio, led by the Galaxy S7 and S7 Edge.
IBD'S TAKE: Apple stock has an IBD Composite Rating of 23, putting it in the bottom quarter for stocks in key metrics over the last 12 months.
Apple posted an operating profit of US$10.1 billion and sales of $42.4 billion in the quarter ending June 25.
The strong quarter comes in contrast to that of Apple Inc., which reported a 27% drop in quarterly profit Tuesday, its second consecutive quarter of falling revenues.
The forecast comes on the heels of a Canalys report earlier this week that indicated the worldwide smartphone market showed modest growth in the second quarter after a disappointing first quarter.
Looking ahead, the South Korean giant predicted a solid second half of the year, but its spending on marketing is expected to rise as Samsung seeks to counter the arrival of the upcoming Apple iPhone in the third quarter. Even so, Samsung said demand for mobile and non-volatile storage chips increased, helped by the company's competitive edge in differentiated products, including 20nm DRAM, V-NAND and 14nm mobile application processors. Samsung dominates the global supply of OLED display panels for mobile phones.
The Note series has never had as much of a sales impact as the S-series smartphone, and there will be increased competition with a new iPhone set for release later in the year.
Sales climbed to 50.94tn won (€41bn) while operating profit came to 8.14tn won (€7.3bn). Every quarter, Samsung owns about a fifth of a market, though sometimes its share is closer to one quarter. That's a nod to the Galaxy Note 7, which will see an official launch on Tuesday. Samsung phones accounted for nearly a quarter of all smartphone sales during the three months.
"Apple continues to face iPhone fatigue among consumers and the new iPhone SE model has not been able to stem that trend". According to the company the flagship devices of Galaxy S7 and S7 edge were the main contributors for the growth within the mobile segment.
Source: Samsung profits boosted by smartphone sales
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