Samsung Reported To Make An Operating Profit That’ll Go Beyond $6.8 Billion

Omar Sohail
Posted Jun 28, 2016
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After the abysmal launch of the company’s Galaxy S5, Samsung changed its stance with the release of its Galaxy S6 family and Note 5. We have to say that there were enough gripes from those devices that made the company rethink the features side of things, and thus, it came back strongly with the release of its Galaxy S7 and Galaxy S7 edge. It’s not just the company’s smartphones that have bolstered the operating profit for the South Korean giant, but other factors too, which you will find out shortly.

Analysts Predict That The Operating Profit For Samsung Is Going To Exceed $6.8 billion For The Second Quarter Of This Year

According to Lee Jae-yoon, an analyst from Yuanta Securities, Samsung’s firm’s IT and mobile communications business unit and consumer electronics business unit would show an improved sales performance in the quarter.

“The second-quarter revenue and operating profit will come in at 51.3 trillion won and 8 trillion won, respectively, beating market estimates.”

There were two products that the company attributes for such a mammoth operating profit expectation; Galaxy S7 and memory chip sales. Additionally, the consumer electronics business is said to have gained momentum for improved profit margin from the previous quarter. The profit margin of the consumer electronics business unit in the first quarter stood at 4.8 percent, up from 2.7 percent in the last quarter in 2015. Samsung is also battling with LG with being a chief supplier of OLED panels, and majority of manufacturers rely on firms like Samsung and LG to provide them with such displays for their smartphones because of their following benefits.

  • Richer colors
  • Faster refresh rates
  • Lowered power consumption
  • Thinner size
Note 7 Fiasco Wipes $17bn off Samsung (KRX:005930)

Samsung Reported To Make An Operating Profit That’ll Go Beyond $6.8 Billion

Samsung has also targeted the storage market with its affordable 850 EVO series of SSDs, which feature 3D-V NAND flash, which is said to deliver more reliability, lifespan and higher read and write speeds compared to regular NAND memory chips. Playing out a skirmish with TSMC for 10nm FinFET chips for future mobile SoCs and DRAM chips has not been going too well, because it has been reported that Apple is going to hire TSMC as the sole supplier of chips for the upcoming A10 SoC. However, in order to negotiate pricing terms, we sincerely believe that the Cupertino tech giant has also brought Samsung into the fold, which will provide yet another stream of revenue for the tech giant.

Which divisions do you believe is where Samsung was able to capitalize the most on the project operating profit for the second quarter? Let us know your thoughts immediately.

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