Samsung quarterly operating profit renews all-time high

Phillip Butler
July 27, 2017

Samsung Electronics has reported an all-time high quarterly profit, thanks to booming demand for memory chips.

By division, the home appliance and air solution unit generated 465.7 billion won operating profit, up 7.4 percent on-year, with the revenue coming in at 5.25 trillion won, up 11.7 percent.

The semiconductor business raked in 8.03 trillion won in operating profit in the second quarter, up 204 percent from the previous year.

Buoyed by voracious requests for DRAM and NAND memory chips for everything - from servers to IoT connected devices - Samsung's semiconductor division alone was responsible for the whopping $7.2 billion in operating income on sales of $15.8 billion.

Intel, which reports its quarterly earnings later Thursday, is expected to report $14.4 billion in quarterly revenue.

"It was a great quarter for Samsung, fueled by sales of the Galaxy S8 smartphone", said Holger Mueller, vice president and principal analyst at Constellation Research Inc.


"The S8 has indeed helped get Samsung back onto its feet, hopefully putting the Note7 debacle behind it", Bryan Ma, a technology industry analyst at IDC, said before the announcement.

Just as Saudi Arabia dominates in oil output, Samsung leads in manufacturing the high-tech commodity of memory chips, which enable the world to store the data that fuels the digital economy.

Samsung Electronics said it expected the memory chip boom to continue in the current quarter.

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"The company's strategic model going against Apple Inc's iPhone 8 and Samsung Electronics' Galaxy Note 8 in the second half of 2017 is expected to fall short, making it hard for mobile revenue growth". Apple is forecast to report $8.2 billion in net profits next Tuesday, according to data by FactSet.

This month the firm said it will invest 20.4 trillion won by 2021 to expand and upgrade its chip plants in the South Korean cities of Pyeongtaek and Hwaseong. It is the fifth consecutive quarter for Samsung C&T to report operating profit since it swung to profits in the second quarter past year thanks to consistent efforts to reform its business.

Other reports by Ligue1talk

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