Samsung reports record $9.7 billion profit, buoyed by a 'memory super cycle'


First, the numbers - Samsung made $12.7 billion of operating income and $9.7 billion of pure profit last quarter, the highest in the company's history. That's net income of about 18% on $54.8 billion of revenue, and a very healthy margin for a company that is in the fickle consumer electronics business. That's not the division where most of the profit originated, though, but rather Samsung logged a stellar quarter because of growing demand for its memory chips, OLED display panels, and other humble components it has been building capacity for in the last decade or so. Even with the company's head Lee Jae-yong awaiting bribery trial in detention, Samsung still managed to revamp its inner workings enough to satisfy all demand for its wares.

Buoyed by voracious requests for DRAM and NAND memory chips for everything - from servers to IoT connected devices - Samsung's semiconductor division alone was responsible for the whopping $7.2 billion in operating income on sales of $15.8 billion. That's about 60% of the total profits made by what analysts are already calling a "memory super cycle," but there was a decent contribution from something that is near and dear to our hearts as well - the mobile department. 

It made Samsung $3.7 billion in operating profit, riding on the coattails of robust Galaxy S8 and S8+ sales that Samsung said are 15% higher than the ones of the S7 last year. That income is still a bit less than what Samsung Mobile generated in the same quarter last year, due to the design overhaul of the new flagship Galaxies, and the respective rise in component prices that went into the Infinity Display chassis. 

Samsung is expected to beat Apple's profits for the second time in its history, but the spring and summer quarters are traditionally slower for the team from Cupertino, plus Samsung warned that profit for this quarter may be lower due to marketing expenses over the upcoming Note 8, and a higher share of midrange sales, after demand for its flagships has been satisfied and tapered off.

source: Reuters

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71 Comments

2. slow00

Posts: 97; Member since: Mar 08, 2017

What??????...........No way the numbers are true. What we religiously being taught by Apple die hards for years in this site are the following: - Apple is accounting for at least 120% of the combined operating profits of the global smartphone market on a quarterly basis - No OEM makes money from Android. so Phonearena please check your sources again and modify the article accordingly asap, otherwise their illusions will get spoiled.

4. magnanimus

Posts: 565; Member since: Mar 29, 2013

This is not purely from smartphone sales. This is Samsung as a whole. Also, Apple DOES own a ridiculous percentage (90+) of the total profit from smartphone sales.

10. trojan_horse

Posts: 5868; Member since: May 06, 2016

"This is not purely from smartphone sales. This is Samsung as a whole" Really? Then why didn't we see the operating profits of Samsung Life Insurance, Samsung Heavy Industries, Samsung Everland, and etc...? Sit your ass down, clown... This is just Samsung Electronics (subsidiaries involved in pure tech).

12. piyath

Posts: 2445; Member since: Mar 23, 2012

No you dumb ass... This is Samsung as a whole.....lol Don't act like a 5 year old now. Apple has been doing this for decades while Samsung now only catching up to speed. Even though this quarter is successful I doubt Sammy will retain this profit margin because Apple, LG, Sharp, and many other display manufacturers are spending Billions of $$$ to develop their own AMOLED displays very very soon. APPLE chip orders will also mainly go to TSMC from next year on wards.

23. adi90

Posts: 554; Member since: Dec 21, 2015

Samsung electronics is a separate entity. The profit mentioned in this article is solely about samsung electronics. Tech blogs generally refer samsung electronics as samsung only. It does not mean they are talking about samsung healthcare or samsung insurance. https://www.google.co.in/amp/www.cnbc.com/amp/2017/07/26/samsung-electronics-q2-second-quarter-results.html

26. adi90

Posts: 554; Member since: Dec 21, 2015

When did Trojan horse say that apple does not generate profit? And as far as retaining profit margin is concerned, no one knows if apple can maintain current profit margin due to increasing cost of components. Apple cannot keep on charging whatever they want indefinitely.

27. AxelFoley unregistered

I love how you start out by call someone a "dumb ass", then proceed to making a dumb ass comment.

36. trojan_horse

Posts: 5868; Member since: May 06, 2016

"I love how you start out by call someone a "dumb ass", then proceed to making a dumb ass comment." That's typically piyath, bruh... Wouldnt much from him.

38. trojan_horse

Posts: 5868; Member since: May 06, 2016

Wouldn't *expect* much from him. He trolled his own self in post #12.

51. fyah_king unregistered

Stick to your Asian stuff.lol

52. Tipus

Posts: 869; Member since: Sep 30, 2016

You just made idiot from yourself. Not the first time though:)

60. tedkord

Posts: 17357; Member since: Jun 17, 2009

What's saddest isn't that you're completely wrong and won't admit it, it's that Samsung's good numbers bother you so much that you need desperately to find a way to rationalize them.

69. magnanimus

Posts: 565; Member since: Mar 29, 2013

My apologies if I wasn't clear. I meant Samsung Electronics as a whole not solely smartphones as the first comment implied. There's also no need for rude remarks. You can make your point without resorting to insults

70. trojan_horse

Posts: 5868; Member since: May 06, 2016

My apologies too. When you said Samsung as a while, I assumed you meant exactly what you said, so I felt pissed at that misinformation. Didn't initially intend to be rude. Sorry.

6. Podrick

Posts: 1285; Member since: Aug 19, 2015

Don't forget that S8 lags.

7. slow00

Posts: 97; Member since: Mar 08, 2017

thanks for the reminder! ....but the samsung galaxy s8 lags (ignore this. i have been diagnosed with Lumbergh-itis)

29. Lumbergh

Posts: 463; Member since: Feb 14, 2016

I'm glad the message is being spread. Now they will reinvest the profits and make a lag fix with the next device launch. Looking forward to buying the Note 8.

30. adi90

Posts: 554; Member since: Dec 21, 2015

What will you do once samsung produces a lag free smartphone? You will be seasonally unemployed then.

34. Lumbergh

Posts: 463; Member since: Feb 14, 2016

I'll be very happy. Cheers!

37. slow00

Posts: 97; Member since: Mar 08, 2017

well you can blame me for start spreading the message but in every samsung article you keep removing the goalposts in the comments section bringing chaos to the conversation. ok its clear that according to your belief the s8 has lag problems that need to be adressed but by keep repeating this in every post you dont contribute to a healthy dialogue and this is very annoying tbh

39. Lumbergh

Posts: 463; Member since: Feb 14, 2016

Never my intention to interrupt healthy dialogue and make community members such as yourself frustrated. Understand I'm excited for Samsung to address the one outstanding item holding me back from returning to the brand. I never let brand names affect my purchases. I look for devices with stellar battery life, attractive designs, and fluid performance. Contrary to popular belief, I want to see Samsung do well so they can fix the lag issues they face with its smartphones. My S8+ was a joy to use and couldn't find any weakness other than performance. Members of this community have convinced me to give the Note 8 a strong look so I'm going to do just that and buy one upon release, lag or no lag. Looking forward to it too. Cheers mate!

43. LebronJamesFanboy

Posts: 671; Member since: Mar 23, 2013

That was a fair comment. Don't worry, many of us have experienced lag with our samsung devices......you'll notice some people are a little sensitive to this and can't handle the idea of something being bad about the phone they just purchased. I have an S7E and get lag time to time.

45. slow00

Posts: 97; Member since: Mar 08, 2017

Owner of a galaxy note 4 here. After almost three years of heavy usage the device lags big time every now and then but doesnt bother me at all. I dont believe that samsung phones are lag free and the same applies to all devices even the iphone although many ios users dont want to admit this The spirit /context of my message to Lumbergh was entirely different and appreciate his reply in any case

48. Mr.Pussy

Posts: 348; Member since: Feb 16, 2017

I went from Note 4 to S7 edge oversea unlocked version. Man the S7 edge is almost lag free compared to the Note 4. But I missed the S-Pen tho. I will be getting the Note 8 this year.

55. adi90

Posts: 554; Member since: Dec 21, 2015

Atleast you have started to believe that samsung can fix its lag by next launch. It is a big improvement in itself.

61. tedkord

Posts: 17357; Member since: Jun 17, 2009

They do reinvest the profits into innovating and improving. They have one of the highest R&D budgets in the world. That's how they've managed to put out the best rated smartphones in the world three years running.

64. Flash

Posts: 1972; Member since: May 19, 2017

PSA, tedkord doesn't own the S8 despite his constant "best reviewed" message.

65. tedkord

Posts: 17357; Member since: Jun 17, 2009

PSA, tedkord also doesn't own a Ferrari, even though he thinks they're much better than his Honda. Tedkord is also waiting on the Note 8, the only phone that will surpass the S8 this year.

63. Flash

Posts: 1972; Member since: May 19, 2017

I remember looking at the S8 when my phone unfortunately died on me and it lagged like molasses in the store while I was playing with it.

11. lightyears

Posts: 69; Member since: Aug 24, 2015

Proud owner of S8. It makes Iphone7 looks like an outdated junk.

* Some comments have been hidden, because they don't meet the discussions rules.

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