What They Say
Samsung issued guidance on its Q2 financial result with sales forecast to be around $55 billion and with profits of close to $11 billion. Unusually, the firm highlighted a ‘one time gain’ for the display business, and the Korea Herald reported that the amount was around $435 million and was a one-off payment from Apple for ordering fewer displays than it had forecast.
The display business is estimated by analysts to have made $870 million of profit in Q2. On the other hand, the consumer electronics business (including TV) is believed to be down on Q1 because of weaker sales combined with higher panel prices.
The Herald also quoted analysts as forecasting continued profits and growth for the year, with over $43 billion expected.
What We Think
The result of a 20% net profit on a business like Samsung’s is really impressive and is the result of continued strength in semiconductors (it did really well in DRAM in Q2) and displays as well as in devices. Investors expect chip prices to decline, so despite the strong result, the share price slipped slightly according to Bloomberg. (BR)
(added note – I just spotted that Strategy Analytics thinks that Samsung won nearly 50% of the smartphone memory business – DRAM & NAND)
