★ Samsung Reports Full Q2 Results: Semi and Mobile Drive Growth and Profits (Jul 27, 2017)

I’ve already commented this quarter on Samsung’s preliminary results, which let us know that it would report record high revenues and operating income. But we had to wait until its final and full results for the quarter were out to know the contributions made by its various divisions, though I’d had a good guess in that first comment. As expected, the Semiconductors division (which includes memory, ASICs, and Samsung’s new separate foundry business) was by far the strongest performer in the quarter, growing 47% year on year and contributing 57% of operating income for the company on just 27% of its revenue. That was driven, as expected, by a combination of market growth and price increases, with memory making up nearly 80% of sales. But the IT & Mobile division, which has been stagnant or declining in recent quarters, also contributed to revenue growth, up 17% year on year, the best in several years. A big contributor was the shift of the company’s Galaxy S launch from Q1 to Q2 this year, which had sent Q1 revenues down 15% year on year but boosted the year on year comparison this time around. Profits and margins, though, were both down on last year in the mobile division, suggesting perhaps because of the expenses associated with the launch shifting from Q1 to Q2 as well, and perhaps because the company is making a big marketing push around one of its most compelling flagships in several years. My bet is that the rest of Samsung’s year will go as well as its first half, based largely on the combination of higher chip prices, growing components shipments, and a big boost from Apple OLED orders for its new phones. Some of those drivers will ease next year, especially if other suppliers are able to ramp up OLED production to help meet Apple’s needs in the next generation of phones, but Samsung’s on a pretty healthy trajectory right now and there’s not much sign of that stopping. The biggest short term question is how it will position the Note 8 that’s due to launch next month, given the increases in usable screen size in the Galaxy S line and last year’s troubles, and how competitive it and the Galaxy S8 will be versus the new iPhones launched a month later by Apple.

via Samsung (PDF)

The company, topic, and narrative tags below will take you to other posts with the same tags. The narrative link(s) will also take you to the narrative essay which provides additional context behind the post.

Vote for or share this post

Use the Like button below to vote for this post as one of the most important of the week. The posts voted most important are more likely to be included in the News Roundup podcast episode I do each week. Or use the sharing buttons to share a link to this post to social networks or other services.