Telecommunication Sales Pushes Revenue Growth for Samsung in Second Quarter 2011

Continued strong demand of GALAXY S II contributes to strong Q2 earnings

Mobilk - DUBAI, United Arab Emirates – Samsung Electronics Co., Ltd., a global leader in digital media and digital convergence technologies, recently announced strong global financial earnings for its telecommunications segment in second quarter of 2011 registering a solid quarterly operating profit of USD1.59 billion on revenue of USD11.57 billion.

Samsung’s telecommunications businesses – Mobile Communications and Telecommunications Systems - achieved an operating profit margin of 13.7 percent for the quarter. The segment also recorded a rise in sales with 43 percent year-on-year due to strong demand for Samsung’s GALAXY S II smartphone and other mobile devices.

Samsung announced revenues of USD37.48 billion on a consolidated basis for the second quarter ended June 30, 2011, a 4-percent increase year-on-year.  For the quarter, the company posted consolidated net income of USD3.34 billion, representing an 18-percent decrease year-on-year. Consolidated operating profit for the quarter was USD3.56 billion. In its earnings guidance disclosed on July 7, Samsung estimated second-quarter consolidated revenues would reach approximately USD37.06 billion with an operating profit of USD3.52 billion.

 

Regionally, Samsung recorded an average of 20 percent market shares in the Gulf countries of UAE, Kuwait, Qatar, Bahrain and Oman. The Galaxy S II smartphone, which was recently launched in the region, is expected to increase Samsung’s market share in the Gulf by 10 percent by the fourth quarter of 2011.

“In the Gulf market we recorded a 7 percent increase year-on-year in mobile communication devices sales for the second quarter of 2011. This quarter we launched our premium flagship smartphone, the GALAXY S II in all Gulf markets and we expect it to perform in line with the global response we have received,” said Ashraf Fawakherji, General Manager of Samsung Gulf Electronics Telecommunication Group.

“In the third quarter, we expect the telecommunication segment to grow steadily by 20 percent with the continued strong demand of the mobile handsets and the launch of the new portfolio of tablets on the region. We will aim to increase our mobile shipments in the region by 30 percent in the second half of the year,” he added.

Globally, Samsung’s Mobile Communications Business saw revenues rise 45 percent year-on-year to USD11.11 billion.  Shipments of mobile handsets increased in the high-single-digit range quarter-on-quarter driven by brisk sales of smartphones including the flagship GALAXY S II, which began to be rolled out globally during the quarter.  The average sales price of handsets increased by more than 10 percent.

Samsung expected market demand for mobile handsets to increase by more than 15 percent in the second half, driven by consumers upgrading to smartphones.  In the third quarter, Samsung will continue to drive sales of the GALAXY S II and strengthen its product lineup with new mobiles featuring Long-Term Evolution technology.  The company will also proactively respond to increased demand for tablet devices with its GALAXY Tab portfolio in various sizes.  The Mobile Communications Business is on track to achieve its 2011 goals of outperforming market growth and maintaining a double digit operating margin.