What They Say
Samsung Electronics said that Q2 saw its revenue rise to a record level at $59.3 billion with operating profits of $10.8 billion, up 12% on last year.
SDC (Samsung Display Corporation) saw record second-quarter revenue and operating profit for mobile displays driven by solid demand from major customers. Performance in the large panel business was weaker due to initial ramp-up costs of quantum-dot (QD) displays and a decline in LCD prices. Overall revenue was $5.92 billion with operating profit of $814 million helped by the increased adoption of OLEDs in IT applications.
The MX (Mobile eXperience) Business posted a sequential decline in earnings as material and logistics costs rose, but revenue increased from a year earlier driven by sales of premium models. The Networks Business saw an increase in revenue from the previous quarter and added DISH Network as a customer.
Earnings in the Visual Display Business declined due to weak global TV demand while the Digital Appliances Business posted a record high quarterly revenue for the second straight quarter as sales of Bespoke products expanded globally. The Visual Display and Digital Appliances businesses saw $11.39 in revenue and $276 million in operating profit in Q2.
Looking ahead, for SDC, earnings in the mobile panel business is expected to increase, driven by new smartphone launches and expansion into new application areas such as automotive and gaming. Earnings in the large display business is expected to improve as demand increases for QD displays and the firm said that more brands are adopting QD-OLED.
The MX Business expects to post solid profitability with foldable products becoming mainstream as the Company targets foldable sales to surpass that of the Galaxy Note series. For the Networks Business, the Company plans to maintain momentum in revenue growth by expanding overseas businesses.
In the Visual Display Business, the Company will capture demand in the premium segment by boosting sales of strategic products, such as Neo QLED, Super Big and Lifestyle TVs. The Digital Appliances Business will focus on improving profitability by increasing sales of premium products.
What We Think
The growth was good and this was a strong result but was below analyst estimates because of weakening DRAM prices. The comment about more brands for QD-OLED was interesting, given the relatively limited capacity that SDC has. (BR)
