Samsung’s 2nd-Quarter Profit Jumps
Samsung Electronics Co. said Friday that its second-quarter profit nearly tripled, and the South Korean company raised its dividend tenfold to signal its confidence in its business prospects.
For the three months ended June 30, Samsung’s net income climbed to $2.7 billion from $968 million in the same period last year. Sales jumped 52% to $12.8 billion from $8.4 billion.
The dramatic growth stemmed from sales of computer memory chips, flat-panel liquid crystal display monitors and mobile phones, the company said.
“The first-half operating profit already exceeded the entire profit for the last year,” said J.J. Park, an analyst with J.P. Morgan Chase in Seoul. “It is one of the highest profits among global tech companies.”
Investors had bid down the company’s stock to $350.07 on Thursday -- its lowest price all year -- in anticipation of weaker results. But it rose 3.5% to $362.50 on the Korea Stock Exchange after the earnings were announced.
Samsung executives expressed optimism that the growth would continue. The company’s board raised the stock dividend to $4.28 a share, up from 43 cents last year.
The boost “reflects our confidence in our earnings momentum going forward,” said Woosik Chu, Samsung’s senior vice president for investor relations.
The chip business contributed more than half of the company’s operating profit, while the LCD division reported the biggest jump in operating profit. But Chu warned that LCD prices could fall as much as 20% in the second half of the year.
Phone prices have already been squeezed by competition in the U.S., the company said. Although the number of phones sold during the second quarter rose 13% to 22.7 million from 20.1 million in the first quarter, Samsung’s handset revenue remained even at just under $4 billion. Hyun Suk Chung, who oversees Samsung’s phone division, said he expected phone revenue to rise in the third quarter because of the growing popularity of higher-priced multimedia phones.
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Reuters was used in compiling this report.
