Samsung Electronics has released the financial result of Q2 2014 for the quarter that ended on June 30, 2014. Samsung has recorded a revenue of 52.35 trillion Korean won on a consolidated basis, a 2 percent decrease quarter-on-quarter while the operating profit stood at 7.19 trillion won, making it a 15-percent drop from a quarter ago.
Samsung says the dismal second quarter performance was affected due to slow sales of Samsung mobile devices that resulted into heavy marketing expenditure to reduce inventory. The slow demand of smartphones and tablets also affected Samsung’s chip business.
Samsung expects Q3 2014 to be a challenge but are hopeful due to strong seasonality of consumer electronics products.
Semiconductors:
Samsung’s Semiconductor division that includes Memory and System LSI businesses, posted an operating profit of 1.86 trillion won and 9.78 trillion won in consolidated revenue. The Memory division saw a 10 percent gain (QoQ) with 6.92 trillion won in revenue.
Display Panel:
The Display Panel business recorded revenues of 6.33 trillion won with an operating profit of 220 billion won. Samsung saw an improvement in earnings in the LCD panels thanks to the shipments of both large size panels and UHD TVs.
Going in the second half of 2014, Samsung expects the display panel market to improve further, driven by seasonal demand. Samsung’s OLED panels will have a bearish outlook due to decreasing orders.
IT & Mobile Communications (IM):
The star division of Samsung Electronics – IT & Mobile Communications (IM) didn’t help the giant to record results this quarter. Consisting of Mobile Communications and Networks, the IM division posted operating profits of 4.42 trillion won on 28.45 trillion won in revenue, out of which, mobile business attributed to 27.51 trillion won of revenue.
In 2H 2014, Samsung is expecting the demand to rise, thus improving profitability with the launch of new devices, including a flagship phone along with entry-level and mid-range devices.
Consumer Electronics:
The Visual Display, Digital Appliances, Printing Solutions and Health and Medical Equipment businesses are part of Consumer Electronics. The business posted a consolidated revenue of 13 trillion won, a 15 percent increase QoQ and an operating profit of 770 billion won, a 300 percent rise.
Samsung managed to outperform the TV market with good sales volume and shipments, thanks to the introduction of UHD Curved TVs as well as marketing during the FIFA World Cup. Going forward, the growth in TV sales is expected compared to last year.
The Digital Appliances business earnings increased quarter-on-quarter due to sales of premium products and a seasonal rise in air conditioner sales.
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