Samsung is expected to announce another strong quarter at the end of this month, with record profits driven by its Galaxy smartphone sales. For now, the South Korean company has issued its earnings guidance for the second quarter, estimating sales of 47 trillion won (roughly $41.4 billion) and an operating profit of approximately 6.7 trillion won (roughly $5.9 billion). The full numbers, however, will come at the end of the month.
Samsung expects its second quarter operating profit to have climbed 14.5 percent from the previous quarter and 79 percent from the same quarter last year. The company's Galaxy smartphones have soared to the top of the market recently, overtaking even Apple's popular iPhone. Samsung's Galaxy devices have proved to be so popular that Samsung barely managed to keep up with the great demand for its latest iteration, the Samsung Galaxy S3.
Samsung faced parts shortages affecting the supply of Galaxy S3 smartphones worldwide, as the demand for the devices was far greater than the company had anticipated. Samsung has previously said it expects the smartphone to have sold more than 10 million units by July, which is quite impressive considering the phone was launched in May.
Samsung's estimated sales of around 47 trillion won ($41.4 billion) translate into a 20 percent increase from the same quarter last year, but the company did not offer any breakdown of how much of that amount would be made up of mobiles. Meanwhile, analysts have estimated that operating profit from Samsung's mobile unit could have more than doubled, currently accounting for more than two-thirds of all its income. Should this prove to be accurate, it would mean that Samsung's other businesses were not doing that well.
The global recession has affected everyone, and TV sales have slumped in Europe and the United States. Still, Samsung has been doing better than its Japanese rivals in the sector. Moreover, Samsung is also the world's top chipmaker, and it is strong in NAND flash chips and other semiconductors used in mobile technology. Smartphones have no doubt helped drive the demand for those, and the South Korean tech giant also has plenty of cash from smartphone sales to pour into its chip business.
Investors, however, are still not convinced. Although Samsung anticipated high quarterly results, its shares dropped 2 percent after the company released the estimate figures. The patent wars with Apple could be one of the reasons, as Samsung has recently lost important battles against Apple in the U.S. Samsung's Galaxy Tab 10.1 and Galaxy Nexus smartphone are now banned in the U.S. pending trials over the alleged patent infringements. The company had sought to lift the bans, but its attempts were rejected.
