At the mobile division, revenues of KRW 26.06 trillion were up 1 percent from the first quarter but fell compared to KRW 28.45 trillion in the year-earlier period. Operating profit at the division nearly halved year-on-year, to KRW 2.76 trillion from KRW 4.42 trillion. Samsung said the sequential improvement in results was thanks to the launch of the Galaxy S6 smartphone, which helped increase the average selling price. However, smartphone shipments were still down compared to the previous quarter, as the S6 could not offset slower sales in the low-end and mid-range markets. Samsung said it expects growth in the smartphone market to slow in the second half of the year, with only a small sequential increase in sales in Q3. It plans to focus on the high end of the market, with strategic pricing of the S6 and launching more large-screen models. This should help grow smartphone shipments from Q3 while tablet sales are expected to remain flat.
At Samsung's consumer electronics business, quarterly sales fell 13.8 percent year-on-year to KRW 11.2 trillion, hurt by negative currency effects. Revenues were up 9 percent from Q1 though, helped by improving TV sales in North America and strong sales of UHD and curved TVs. Samsung said it expects market demand to improve in H2, although forex factors remain a risk. It plans to expand its own range of affordable premium TVs.
The company's components division was the one growth area in the quarter, with revenues up to KRW 17.87 trillion from KRW 16.23 trillion a year ago. Operating profit jumped to KRW 3.87 trillion from KRW 2.09 trillion. Samsung said it benefited from strong semiconductor demand in the mobile and server markets and it expects this to continue in the rest of the year. The outlook for display panels is less certain, amid industry capacity expansion and negative currency effects in Europe and emerging markets. The company sees growth in larger displays and plans to focus on profitability in the face of the market uncertainty.
