Samsung today published their Q2 2016 results and its an upward trend for the South Korean chaebol. For the quarter that ended on June 30, 2016, Samsung reported a revenue of 50.94 trillion won, an increase of 2.40 trillion won YOY and recorded an operating profit for the quarter at 8.14 trillion won, an increase of 1.24 trillion won YOY.
Samsung says the good quarter is a result of sales of premium products and solid components business performance.
For the rest of the year, Samsung expects strong performance due to increased earnings in the component business along with consumer electronics but expects the marketing expenditure to rise for the IM division.
Just like every quarter, here’s a breakdown of individual businesses.
Semiconductors:
The semiconductors business that comprises of Memory and System LSI divisions posted consolidated revenue of 12 trillion won and an operating profit of 2.64 trillion won.
The memory division saw a strong quarter due to the growth in demand and reduction in cost due to process migration. The System LSI business also posted good numbers due to demand for its 14nm APs and image sensors.
In H2 2016, Samsung expects a good demand for their products that will provide stable business and revenue.
Display Panel:
The Display Panel division posted a revenue of 6.42 trillion won and an operating profit of 0.14 trillion won due to increased sales of OLED panels and better yield of LCD TV panels. The OLED panel demand is strong, thanks to the sales of smartphones whereas LCD business continued the growth by keeping the supply-demand in check.
In the second-half, Samsung expects the OLED panels business to have a stable or rise in demand despite slowdown in the smartphone market. Samsung will also introduce new OLED products like flexible and high-resolution displays. For LCD panels, the company will concentrate on UHD panels.
IT & Mobile Communications:
The IT & Mobile Communications division saw a slight decrease of revenue QoQ and posted 26.56 trillion won in consolidated revenue but consolidated operating profit recorded a hefty rise from 3.89 trillion won in the last quarter to 4.32 trillion won. The rise in operating profit is a result of good sales of Galaxy S7 and Galaxy S7 edge.
Samsung expects to focus on on YOY earnings and concentrate to provide a mix of products, including the upcoming Galaxy Note7.
Consumer Electronics:
The CE division consists of Visual Display (VD), Digital Appliances (DA), Printing Solutions and Health and Medical Equipment (HME) businesses and cumulatively, the division posted consolidated revenue of 11.55 trillion won and a profit of 1.03 trillion won.
The VD earnings remained stagnant due to sluggish economic conditions , thanks to sales of premium UHD TVs and Curved TVs but the TV market demand decreased due to weak seasonality and economic downturn in emerging markets.
The DA business also showed some improvement YoY due to sales of premium products like Chef Collection refrigerators and AddWash, activ dualwash washing machine.
Looking ahead, the VD biz is expected to show some decline in TV demand YoY due to weakened demand in Europe and economic slowdown in emerging markets whereas the digital appliance will remain limited.
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