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The commercial success of the Galaxy S7 series is boosting Samsung's operating profits

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The commercial success of the Galaxy S7 series is boosting Samsung's operating profits
According to a fresh report coming from Samsung's home market of South Korea, local market analysts expect Samsung to report a very strong operating profit for the second quarter of 2016.

Quoting a report from South Korea's Shinhan Investment, Korea Times says that Samsung's operating profit for the quarter is expected to rise above the 7 trillion won mark. Among the main drivers behind this growth, the report highlights a strong commercial success for the Samsung Galaxy S7 series as well as a growing demand for flash memory chips.

Most of this profit (about half) is expected to come from Samsung's mobile business, which is estimated to reap 3.6 trillion won in profit for the April-June quarter. If the figure turns out to be accurate, it would be good for 12.4% YoY growth.

As we've heard since a few weeks ago, Samsung's Galaxy S7 and Galaxy S7 edge are performing above market expectations in terms of sales. According to Shinhan Investment analysts, Samsung is expected to sell about 14 million Galaxy S7 units by the end of the quarter, a figure that would be good for a 40% improvement compared to the previous quarter. However, although the Galaxy S7 is selling better than expected, the profit coming from Samsung's mobile division is also expected to be boosted by Samsung's higher profit margins on lower-end devices such as those from the Galaxy A and Galaxy J series.

The report claims that five other brokerage firms now expect Samsung to draw in more than 7 trillion won in operating profit. If this estimate turns out to be accurate, this would be the first time in nine months that Samsung's profits rise above the 7 trillion won mark.

Aside from Samsung's mobile division, the flash memory business is also expected to boost Samsung's overall profit. Samsung's device solutions unit, which is mostly responsible for the memory chip business, is expected to report 2.6 trillion won in operating profits for the second quarter of the year. Samsung's display division is also expected to report a minor but existing profit for the April-June quarter.

source: Korea Times

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