South Korea based Samsung Electronics announced on Thursday a gain of 12% in earnings for its second quarter from January through March that beat estimates thanks to strong sales of Galaxy S7 its line of smartphones.
The mobile division ended up being the company’s biggest earner, which has not happened since the 2014 second quarter. This is a sign that the top maker of smartphones in the world has righted its ship following two years of contracting profits and losses in market share.
Boasting a better camera, microSD storage and waterproofing the Galaxy S7 lineup of phones in on track to set new shipment records for the first year, lifting the hopes that the mobile business can post its first profit gain for a year in the past three years.
The company said its inventory levels were low for the latest model, which suggested strong momentum.
During the next quarter, a solid performance is expected to continue said Robert Yi the head of investor relations during a conference call following the posting of earnings. He added that the company was cautiously optimistic its operating profit would increase from the previous quarter.
Samsung’s operating profit during its January through March quarter ended at 6.7 trillion won or $5.84 billion, which was slightly higher that its estimate earlier of 6.6 trillion.
Revenue was up 5.7% ending the quarter at 49.8 trillion won compared to its guidance of more than 49 trillion won.
Profit in the division of smartphones leaped by 42% to end at 3.9 trillion won, which was nearly a high of two years.
Samsung announced it expected further growth in sales for the line of Galaxy S7 handsets during the ongoing quarter, along with growth in its low to mid tier lineup of products citing an improved profitability on its lower end lineup like the Galaxy A as well as J series.
The company is expecting mobile shipments for the second quarter including for non-smartphones to drop from the 92 million during the just ended quarter, partly due to older models being phased out. However, the average sales price will increase slightly.