Samsung Electronics set for best quarter in over 2 years on second quarter smartphone boost

Samsung Electronics set for best quarter in over 2 years on second quarter smartphone boost

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Tech giant Samsung Electronics Co Ltd <005930.KS> is poised to issue guidance for its best quarterly profit in more than two years, propelled by a surge in mobile earnings on the back of robust sales of its flagship Galaxy S7 smartphones.

The South Korean giant will disclose its estimates for second-quarter earnings on Thursday, with analysts predicting a strong mobile division contributed to a 13% jump in operating profit from the same period a year earlier.

The average forecast from a Thomson Reuters survey of 16 analysts tips Samsung to report April-June operating profit of 7.8 trillion won ($6.8 billion), the highest since an 8.5 trillion won profit in January-March of 2014.

The mobile division of the world’s top maker of smartphones and memory chips was likely its top earner for the second straight quarter with a 4.3 trillion won profit, according to the survey. Samsung surprised many with better-than-expected first-quarter earnings, and issued guidance for a further pickup in April-June.

“Galaxy S7 sales are better than expected in the first half, and the semiconductor business is also outperforming rivals,” said KTB Asset Management’s Lee Jin-woo. The fund manager estimated the firm’s quarterly operating profit would also stay strong in both the third and fourth quarters at between 7 trillion won and 8 trillion won in each.

Samsung’s smartphone business had been squeezed before the start of this year betweenApple Inc , at the high end of the market, and Chinese rivals like Huawei Technologies [HWT.UL] in the budget segment. But the Galaxy S7 has provided a catalyst for the earnings rebound, likely putting the mobile business on track to record its first annual profit growth in three years. Read More

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