Samsung Electronics announced second-quarter revenues of KRW 37.89 trillion, up 17 percent year-on-year. Operating profit rose 88 percent to KRW 5.01 trillion, and net profit improved to KRW 4.28 trillion from KRW 2.33 trillion a year ago. The results were in line with the company's earlier forecast, with growth driven by a recovery in its components and semiconductors business, helping to offset price pressure in consumer electronics. "With intensified competition throughout the digital media and mobile industries going forward, it may become a challenge to maintain current profitability levels," said Robert Yi, head of Samsung Electronics' investor relations "However, we will continue to focus on introducing differentiated products and widening our technology leadership in components to meet these difficult market conditions." Strong seasonal demand for core components is expected to drive Samsung's performance in the third quarter, although increased market supply is also forecast. Samsung forecast that continued price competition in its CE businesses will put downward pressure on profit margins in the third quarter. Samsung's telecom division posted an operating profit of KRW 630 billio in Q2, down from KRW 980 billion a year ago, on revenue down 4 percent to KRW 8.78 trillion. The operating profit margin fell to 7.2 percent from 10.8 in Q2 2009, as competition caused a slight decline in the average handset price and earnings were affected by the fall in the euro. Samsung sold 63.8 million handsets during the second quarter, an increase of 22 percent year-on-year but down slightly from 64.3 million in Q1 due to a slowdown in Europe. The recently launched Galaxy S and Wave handsets made little contribution in the quarter but are expected to help grow H2 sales. Samsung forecast high single digit sequential growth in shipments for the third quarter. Touch-screen mobile handsets made up 30 percent of Samsung's unit sales during the second quarter, compared with 15 percent a year ago. Samsung said it will also launch a range of mid-end smartphones as part of its strategy to provide mobile devices for every lifestyle.
