As expected, Samsung today released the financial results for the second quarter that ended on June 30, 2015 (Q2 2015). Samsung’s consolidated revenue increased by 3 percent quarter-on-quarter (QoQ) at 48.54 trillion won compared to previous quarter’s 47.12 trillion won. Samsung recorded a 15 percent rise (QoQ) of operating profit at 6.90 trillion won whereas the net profit stood at 5.75.
The star business for this quarter is the semiconductor division, thanks to the increased demand for memory products and mobile application processor (AP). The mobile division also recorded some profits but were negated by the higher marketing costs of new product launches.
Samsung expects the second half of 2015 to be tough but will try to improve its earnings with a mix of product and strategy.
Semiconductors division posted a consolidated revenue of 11.29 trillion won, a good 10 percent increase QoQ along with an operating profit of 3.4 trillion won for the quarter.
Samsung says although there’s a weak seasonality, the demand for DRAM products for mobiles and servers were high. Meanwhile, the System LSI business saw increased sales of its 14nm AP as well as camera sensors.
For Q3 2015, Samsung expects the demand for DRAM products to increase along with a good demand of NAND products and sales of APs and camera sensors.
The Display Panel division posted 6.62 trillion won in consolidated revenue, a 3 percent decrease QoQ and 540 billion won in operating profit for the quarter. Samsung reckons the ramp-up cost of new OLED flexible display line as the result of decrease in profits. Despite the decrease in LCD panel shipment, Samsung says the earnings improved due to increase in shipment of larger-sized TV panels.
In Q3 2015, Samsung expects the Display Panel earnings to be at the same level.
IT & Mobile Communications:
The IT & Mobile Communications division recorded a revenue of 26.06 trillion won and 2.76 trillion won in operating profit.
The quarter saw a marginal increase of sales and earnings due to an increase of ASP, thanks to high-end devices but suffered due to the decrease shipments of mid and low-end segment and marketing expenses.
For Q3 2015 and rest of the year, Samsung wants to focus sales on high-end products and have also confirmed to cut the price of Galaxy S6 models. Samsung expects the market demand for phones to improve while tablets to be at the same level next quarter as well.
The CE division consists of Visual Display (VD), Digital Appliances (DA), Printing Solutions and Health and Medical Equipment (HME) businesses and cumulatively, the division recorded 11.20 trillion won in consolidated revenue and a profit of 210 billion won.
The premium TV sales in Europe protected Samsung from foreign exchange price but it’s the shipments in the US that took the division to profit. Samsung’s shipment of LCD TVs in North America rose to 33 percent QoQ with UHD TVs at 55 percent and Curved TV at 61 percent. The DA business also saw improved due to increased sales of refrigerators and washing machines in North America.
In the third quarter, Samsung will expand profitability through sales of cheaper UHD TVs.