Samsung has announced its second-quarter 2010 earnings, and the electronics giant is sitting pretty.  Revenues were 37.89 trillion Korean Won (about $32 billion USD).  That's a 17 percent year-over-year increase.  The net income for the second quarter was 4.28 trillion Korean Won (about $3.8 billion USD).

Of interest to us -- Samsung says it sold 63.8 million handsets in the quarter, which is a 22 percent YoY increase.  Samsung seems pretty open with the breakdown of all the numbers, including some interesting facts about phone pricing, their plans for smartphone market share increase through the Galaxy S line, and the LCD market overall are in the press release, which you can read after the break. [Samsung] Thanks to Professor Keith for help with the currency conversions!

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Samsung Electronics Announces Second Quarter 2010 Results

on Jul 30, 2010

Record operating profit of 5.01 trillion won on revenues of 37.89 trillion won

SEOUL, Korea – July 30, 2010 – Samsung Electronics Co., Ltd. today announced revenues of 37.89 trillion Korean won on a consolidated basis for the second quarter ended June 30, 2010, a 17 percent increase year-on-year. For the quarter, the company posted net income of 4.28 trillion won. 

Consolidated operating profit for the quarter was a record 5.01 trillion won, an 88 percent increase year-on-year. The figure tops the previous high of 4.41 trillion won in the first quarter of 2010. 

In its earnings guidance disclosed on July 7, Samsung estimated second-quarter consolidated revenues would reach approximately 37 trillion won with an operating profit of 5 trillion won. 

The company’s increased profitability in the second quarter was driven by significant improvements in its components businesses. The Semiconductor Business recorded an operating profit of 2.94 trillion won on sales of 9.53 trillion won, while the LCD Business generated an operating profit of 880 billion won on 7.76 trillion won in sales. Samsung’s set businesses – spanning digital media, IT solutions and telecommunications – also performed well despite increased price competition and uncertain global consumer sentiment. 

“In the second quarter, our component businesses performed very strongly, yet it was a more challenging quarter for our set businesses,” said Robert Yi, Vice President and head of Samsung Electronics’ Investor Relations Team. "With intensified competition throughout the digital media and mobile industries going forward, it may become a challenge to maintain current profitability levels. However, we will continue to focus on introducing differentiated products and widening our technology leadership in components to meet these difficult market conditions.” 

Strong seasonal demand for core components will drive Samsung’s performance in the third quarter, although increased market supply is also forecast. Samsung forecasts that continued price competition in its set businesses will put downward pressure on profit margins in the third quarter. 

Samsung also announced that total capital expenditures for the first half of 2010 reached 9.2 trillion won, representing 51 percent of the total of 18.2 trillion won in capex planned for 2010. 

Semiconductor Business Records 30.8 Percent Profit Margin 

Samsung’s Semiconductor Business recorded consolidated sales of 9.53 trillion won with an operating profit of 2.94 trillion won in the first quarter, representing a profit margin of 30.8 percent. Reflecting the market recovery, operating profit was up 765 percent on the 340 billion won recorded a year ago. 

The Memory Division continued to drive growth, accounting for 6.71 trillion won of sales, an increase of 74 percent year-on-year. Strong demand in the DRAM market was driven by a mid 20-percent increase in PC shipments and more than 30-percent rise in gigabytes per system year-on-year. In NAND, despite weak seasonality, demand remained steady due to strong sales of mobile devices including smartphones and tablet PCs. Samsung’s enhanced profitability was supported by accelerating the migration to 40-nm-class process technology in the DRAM market and expanding 30-nm-class process in NAND. 

In the third quarter, the demand for DRAM is expected to rise due to strong seasonality, while there will also be increased demand for high-capacity NAND products. Samsung will focus on widening its technological leadership by expanding 30- and 40-nm-class memory products and enhancing price competitiveness. 

LCD Market Growth Strong 

The LCD Business recorded an operating profit of 880 billion won on revenue of 7.76 trillion won. The operating profit margin was 11.3 percent, compared with 4.2 percent the previous year. 

Amid strong market demand, Samsung’s LCD panel sales increased 15-20 percent year-on-year. The industry average sales price for TV panels increased three percent, while notebook PC and monitor panel pricing was flat. 

Samsung focused on increasing sales of premium LCD panels for LED and 3D TVs, while enhancing its manufacturing line efficiency in order to improve profit margins. 

The company expects strong seasonal demand in the third quarter, but increased supply in the market will have a balancing effect. 

Samsung Mobile Handset Sales Up 22 Percent 

The telecommunication businesses – including Mobile Communications and Telecommunication Networks – posted an operating profit of 630 billion won on revenue of 8.78 trillion won. The operating profit margin was 7.2 percent. 

In the Mobile Communications Business, Samsung sold 63.8 million handsets during the second quarter, an increase of 22 percent year-on-year. However, increased market competition caused a slight decline in average sales price. Touch-screen mobile handsets made up 30 percent of Samsung’s unit sales during the quarter, compared with 15 percent a year ago, as Samsung continued to increase its leadership in the segment. 

In the third quarter, Samsung aims to increase its share of the growing smartphone market through flagship devices including the Galaxy S and Wave. The Android-powered Galaxy S has been selected by more than 100 carriers around the world, including four major service providers in the United States. Samsung will also launch a range of mid-end smartphones as part of its strategy to provide mobile devices for every lifestyle. 

Samsung Takes Lead in 3D TV with Sales of 500,000 Units 

Samsung’s digital media businesses – including Visual Display and Digital Appliances – registered sales of 14.54 trillion won, a 20 percent increase year-on-year. Operating profit was 360 billion won, down from 1.16 trillion won in the same period last year. 

In flat panel TVs, Samsung shipped 9.02 million units, up 43 percent year-on-year due to strong growth in developing markets. In developed markets, increased sales of large-sized, LED and 3D-capable TVs drove operating profit. Samsung took a strong lead in the 3D TV market, selling more than 500,000 units following the launch of its new lineup in March. 

Digital Appliance sales rose 23 percent from the same period of 2009, supported by demand in developed markets, Russia and some emerging markets. 
In the third quarter, demand for flat panel TVs is forecast to increase 20 percent year-on-year. Sales of high-end LED models are expected to rise, accounting for 30 percent of total LCD TV sales during the fourth quarter. Samsung will continue to expand its LED TV lineup and reinforce leadership with its 3D total solution.

About Samsung Electronics Co., Ltd. 
Samsung Electronics Co., Ltd. is a global leader in semiconductor, telecommunication, digital media and digital convergence technologies with 2009 consolidated sales of US$116.8 billion. Employing approximately 188,000 people in 185 offices across 65 countries, the company consists of eight independently operated business units: Visual Display, Mobile Communications, Telecommunication Systems, Digital Appliances, IT Solutions, Digital Imaging, Semiconductor and LCD. Recognized as one of the fastest growing global brands, Samsung Electronics is a leading producer of digital TVs, memory chips, mobile phones and TFT-LCDs. For more information, please visit

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