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Motorola Mobility Drops into Quarterly Loss on Weak Handset Division

Motorola Mobility Drops into Quarterly Loss on Weak Handset Division

Samsung Electronics has reported that its revenues rose by 4 percent in the second-quarter to KRW 39.44 trillion (US$37.4 billion), but its net profit dropped by 18% to KRW 3.51 trillion (US$3.3 billion).

By business segment, Telecommunications drove revenue growth in the second quarter, with sales rising 43 percent year-on-year due to strong demand for Samsung’s GALAXY S II smartphone and other mobile devices. Digital Media & Appliances saw sales increase from the previous quarter supported by improved demand for flat panel TVs.

Operating profit declined year-on-year from the record-setting second quarter of 2010, as weakened demand reduced margins in the Semiconductor and Display Panel businesses. The bottom line was supported by an operating profit of KRW 1.67 trillion from the Telecommunications businesses.

“Despite the challenging business environment and global economic uncertainties, we achieved continued year-on-year revenue growth in the second quarter driven by mobile device sales, particularly the success of our smartphones,” said Robert Yi, Vice President and Head of Samsung Electronics’ Investor Relations Team. “Heading into the third quarter – which typically sees increased consumer demand for electronics – we expect competition to remain tight, and will continue to enhance our cost competitiveness and technology leadership in the components businesses.”

Smartphone Sales Boost Telecom Profit

The Telecommunications businesses – including mobile communications and telecommunication systems – posted an operating profit of KRW 1.67 trillion on revenue of KRW 12.18 trillion. The businesses achieved an operating profit margin of 13.7 percent for the quarter.

Samsung’s Mobile Communications Business saw revenues rise 45 percent year-on-year to KRW 11.69 trillion. 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.

For the Telecommunications Systems Business, revenue and operating profit improved year-on-year supported by increased investment from mobile carriers in LTE network infrastructure.

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