Samsung might report 13% increase in operating profit

Jul 5, 2016 09:46 GMT  ·  By

Samsung is set to reveal its evaluation of second quarter earnings on Thursday, but until then, analysts come out with some estimations of the giant's operating profit. The South Korean giant is projected to record its best quarterly revenue in more than two years, according to Reuters.

The company is believed to have experienced its best quarter in two years, as analysts estimate that Samsung's mobile division contributed to a 13% increase in operating profit compared to the same quarter of 2015.

Reuters conducted a survey among 16 analysts and reports that Samsung is expected to see an operating profit of $6.8 billion in April-June, the highest in two years, since Q1 2014.

The company relies strongly on sales of its Galaxy S7 flagship, which took the market by storm and remains one of the best smartphones released this year.

Galaxy S7 and S7 edge made up 54% of the company's profits in Q2

The report also indicates that Galaxy S7 and Galaxy S7 edge made up $3.7 billion or 54% of Samsung's operating profit in Q2 2016. The company shipped 16 million units of the two phones in April-June while the dual-edge variant managed to clearly outsell the flat-screen Galaxy S7.

The report also reveals that, before the start of this year, Samsung's smartphone division saw strong competition from rivals in both the higher end of the market and the budget segment. The South Korean giant's handsets competed against Apple's iPhones and mid-range devices that Huawei released to the market.

An analyst has revealed for Reuters that operating profit margins for mobile phone business are expected to drop in the following quarters, as the Galaxy S7 will see less popularity on the market, but operating profit will still grow on an annual basis.

Samsung is expected to unveil the Galaxy Note 7 in August, and some rumors suggest that it might debut a Galaxy S7 edge+ variant too. In this case, the company's profits will surely keep an ascending trend, but they will still be affected by Apple's release of the iPhone 7 in the coming months.