Samsung is about to report its best profit in two years

Samsung Electronics beat analysts’ forecast to post operating profit of 8.1 trillion won ($7 billion) in the second quarter, achieving two consecutive quarters of earnings surprises, according to a guidance the company released Thursday.

Samsung posted a solid 6.7 trillion KRW profit on revenue of 49.8 trillion KRW in the previous quarter thanks to encouraging sales of its flagship Galaxy S7 and S7 Edge smartphones.

Last month, a report in the Korean Times claimed Samsung would sell 15 million units of the S7 and S7 edge combined compared to 10 million in Q1, citing industry sources.

However, the semiconductor business showed a dip in operating income, which fell about 25 percent to 2.55 trillion won in the June quarter.

Things turned around this year, with the success of the Galaxy S7 and margin improvements from a more streamlined product lineup putting the business on track for its first annual profit growth in three years.

Leading smartphone manufacturer Samsung on Friday launched two new Galaxy series phones while unveiling its Turbo Speed Technology (TST) and Smart Glow technologies.

The results underscore how the South Korean company is defying a slowdown in the smartphone market – Galaxy S7 models, which were timed to go on sale earlier than usual this year, have capitalised on a lull in new iPhones from Apple.

Samsung’s mobile business accounts for a lion’s share of the firm’s overall profit, which has been increasingly squeezed by competition both from Apple’s iPhone in the high-end market and by lower-end devices from Chinese rivals like Huawei. In the first quarter, that division’s profits accounted for 58.2 percent of total operating profit. Samsung relies heavily on its IM division for profits.

It is possible that Samsung’s components businesses had a more mixed quarter, on account of falling prices and a weaker global shipments outlook for computing devices.

The device used in the tests conformed to numerous rumoured expectations for the Galaxy Note 7, including a powerful Samsung Galaxy Exynos 8893 chipset and 4GB of RAM. This would constitute the company’s best result since 2014’s first quarter, when 8.5 trillion won (6.6 billion euro in today’s exchange rates) was added.