Samsung Electronics Co., Ltd will issue guidance for its best quarterly profit in more than two years, with a strong amount of revenue coming from mobile earnings.
The company launched its Galaxy S7 smartphone flagships earlier this year and the demand for the devices pushed Samsung's numbers up by a big margin.
Samsung is said to unveil the estimated second-quarter earnings on July 7. Experts familiar with the matter say that the mobile division pumped up the operating profit by 13 percent, when looking at year-over-year figures.
A Thomson Reuters survey suggests that the company is expected to report an operating profit of 7.8 trillion won (around $6.8 billion). The previous high point in Samsung's balance took place in January-March of 2014, when the company scored 8.5 trillion won ($7.3 billion) profit.
A detailed analysis shows that Samsung's mobile division scored top profits for the second quarter in a row, with a 4.3 trillion won ($3.7 billion) profit. Samsung's earnings from the first quarter were a pleasant surprise to many, and paved the way for a stellar April-June period.
Lee Jin-woo, from KTB Asset Management, notes that the surging numbers of Galaxy S7 purchased handsets, as well as the semiconductor business, helped the company achieve these results.
The fund manager approximates that the enterprise's quarterly operating profit provides clues to both the third and fourth quarters, with a strong chance to maintain a 7-8 trillion won ($6-$7 billion) profit in each.
Samsung faced a challenging start of the year, feeling pressure from the premium sector via Apple and from the affordable segment via Huawei. However, the Galaxy S7 was a powerhouse for the earnings.
Insiders familiar with the matter point out that Samsung sent out about 16 million Galaxy S7s in the second quarter. The margins also increased thanks to the selling of extra curved-screen versions of the device, which are more expensive than the flat-screen standard variant.
In a report, Korea Investment & Securities (KIS) takes a guess at how Samsung's business will evolve during the second half of the year. KIS says that profit margins from the mobile division will slow down, as the boom effect from the launch of Galaxy S7 will fade. However, operating profit should keep mounting.
It should be noted that some of the OEM's sectors are faring rather poorly. Last year, Samsung drew most of its profits from the semiconductor business. In 2016, the demand decelerated, both from personal computer manufacturers and rival smartphone companies.
