Apple rival Samsung posts high Q2 profits on rebounding phone division

Korea's Samsung on Thursday reported its highest quarterly profits in two years — likely based on smartphones, despite intense competition from Apple and Chinese firms like Huawei.

Although the company won't post in-depth results until later this month, Samsung said that its Q2 profits are estimated to have grown 17.4 percent year-over-year to 8.1 trillion won ($7 billion), according to Reuters. The company's mobile division is thought to have been the top profit driver.

It took hits from several directions in 2015, as Apple ate into high-end phone sales with the iPhone 6 and 6 Plus, while Chinese firms advanced into the budget market. The Galaxy S6 meanwhile had a botched launch, with too few of the most popular models available.

The company responded by streamlining its product lineup — thereby improving profit margins — and releasing the Galaxy S7, which has proven the success it was originally hoping for from the S6.

The iPhone 6s and 6s Plus also haven't been as popular as might have been anticipated. Apple posted its first-ever decline in iPhone sales during the March quarter, and multiple suppliers have indicated that the company is holding back on orders, at least for anything prior to this fall's "iPhone 7."

28 Comments

macxpress 5875 comments · 16 Years

About 8 years ago

So did it apparently grow $7 Billion, or are profits $7 Billion total? If its $7 Billion total thats a drop in the bucket compared to iPhone profits, even with lower sales.

stantheman 332 comments · 11 Years

Samsung 'buys' conpinents from one of its own divisions to manufacture phones. That means if it gets a great 'bargain' on components, the phone division will be more profitable and the components division will be less profitable. Now, I'm sure that Samsung execs are too ethical to manipulate its earnings report, but this week's news has reported that profits from Samsung's components division are weaker than expected, while earnings from phones have been stronger than expected.

maestro64 5029 comments · 19 Years

stantheman said:

Samsung 'buys' conpinents from one of its own divisions to manufacture phones. That means if it gets a great 'bargain' on components, the phone division will be more profitable and the components division will be less profitable. Now, I'm sure that Samsung execs are too ethical to manipulate its earnings report, but this week's news has reported that profits from Samsung's components division are weaker than expected, while earnings from phones have been stronger than expected.

Yes it is all a shell game, increase profits could have come from any number of their business units, keep in mind the statement is based on a Reuters report not an actually statement from Samsung. They only said they dropped products and streamline costs. This does not increase profits by 17%. We also know that Samsung as heavily engaged on BOGO activities this last quarter they were trying to move phones anyway they could. I am not sure how you grow profits when you are giving stuff away.

igorsky 772 comments · 9 Years

BabysGotTheBends said:

stantheman said:

Samsung 'buys' conpinents from one of its own divisions to manufacture phones. That means if it gets a great 'bargain' on components, the phone division will be more profitable and the components division will be less profitable. Now, I'm sure that Samsung execs are too ethical to manipulate its earnings report, but this week's news has reported that profits from Samsung's components division are weaker than expected, while earnings from phones have been stronger than expected.

And Apple buys components from suppliers in huge quantities at really good prices, so your point really is negated. Can't you just admit that the Samsung Galaxy S7 has actually been selling well?

All your reply did was make it painfully obvious that you didn't understand @stantheman 's point all. Apple doesn't buy discounted components from itself...get it?

ericthehalfbee 4488 comments · 13 Years

"Although the company won't post in-depth results until later this month"

I think you meant to say "Although the company will NEVER post in-depth results"

Samsung will release an overall "smartphone" shipment number that will sound impressive save for the fact it includes lots of phones in the $100-200 range. And they won't tell us how many S7 variants were sold but will "imply" that the S7 is responsible for the increase in revenues/profits.