14 DAY TRIAL // Samsung Electronics has announced financial results for the second quarter, which ended on June 30, 2016, informing us that the significant growth was recorded following strong performance in the set and component businesses. Overall earnings on the set business grew year-on-year due to the continuous sales increase of premium products.
Samsung Electronics posted revenue earnings of around $45.2 billion while operating profit reached $7.22 billion. Revenue rose 5% year-on-year while operating profits grew 18%, making it Samsung’s best quarterly performance since early 2014.
In a press release, the company has announced that the IT & Mobile Communications Division improved earnings substantially thanks to increased sales of flagship products, like the Galaxy S7 and Galaxy S7 edge. In addition, mid- to low-end smartphones also contributed to the improved profitability, but flagships clearly grew operating profit by 57% while operating margin increased to 16.3%, the highest it has been in two years. Samsung’s Galaxy A and J series maintained profitability in mid- and low-end ranges, and Galaxy S7 edge saw a 50% sales bump.
Samsung expects fierce competition in the smartphone market in Q3
The component business declined this quarter, as overall earnings in this division dropped 28% year-on-year due to the fall in the average price of display panels and chips. However, demand for semiconductors for mobile and SSD rose, and Samsung reported a growth when it comes to differentiated products.
In the press release, the South Korean giant has also made some predictions for upcoming quarters this year. The second half of 2016 should see the company continue to report solid performance generated by increased sales in the component business while fierce competition is expected in the third quarter.
Indeed, Samsung is set to release the upcoming Galaxy Note 7 on August 2 while Apple’s next iPhone is said to arrive one month later. The South Koreans state that, during the third quarter, “the release of a new large-screen flagship smartphone will help to maintain solid sales of high-end smartphones led by the Galaxy S7 and S7 edge.” It's also worth noting that Samsung has also announced that it will debut the Galaxy C series exclusively for the China market.