Chip Sales Buttress Samsung’s Earnings

While sales of the Samsung Galaxy S6 were disappointing, the company said it was unable to meet demand for the Galaxy S6 Edge due to supply issues.

Samsung said the operating profit of the information technology and mobile business division, one of the company’s main revenue sources, fell 37.5 per cent on-year to 2.76 trillion won in the second quarter. At a media event in New York on August 13, Samsung is expected to debut the Galaxy Note 5, its latest phablet, and possibly a version of the S6 Edge, the Galaxy S6 Edge Plus, with a bigger screen.

“Samsung’s semiconductor internet marketing business contains a really good like gmail or hotmail in the future, but damage requirement for smart phones, Computer monitor Movie and individual computer systems won’t be adequate to optimize time to come earnings”, said Lee Jeong, an expert at Eugene Investment and Securities.

“Although revenue increased, profits increased marginally QOQ, due to supply difficulties from higher than expected market demand for the Galaxy S6 Edge”, the statement added.

At a separate board meeting, Samsung also doubled interim dividend to 1,000 won per share.

The second half of 2015 would continue to pose “mounting challenges”, the firm said in its regulatory filing, with smartphone demand predicted to increase but at a lower rate.

The company sold 89 million mobile phones in the second quarter, down 6.3 percent from the first quarter. Smartphones accounted for around 80 percent of the units shipped.

“In order to drive up the shipment, we will actively respond to the market, which could have a negative impact on our average sales price”, said Park Jin-Young, the company’s vice president of mobile communications, during a conference call with reporters.

Although the anti-merger camp lost the final vote, its muscular campaign marked a watershed moment for shareholder activism in South Korea, where family-run conglomerates, or “chaebol”, like Samsung dominate the economy and are used to running their businesses with minimum investor interference.

Samsung has managed to boost earnings for three consecutive quarters.

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