Galaxy Phones Ring in $5.9B Profit for Samsung

Profits expected to keep climbing, but company hedges on Europe
By Mark Russell,  Newser Staff
Posted Jul 6, 2012 8:19 AM CDT
In this photo released by Samsung Electronics Co., models display the Galaxy S III in Seoul, South Korea.   (AP Photo/Samsung Electronics)
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(Newser) – Thanks to the Galaxy S III smartphone's very warm reception, Samsung's profits last quarter climbed 14.5% to a record $5.9 billion, reports Reuters. But because of worry over the euro, which has fallen 5% versus the South Korean won since April, the company remains guarded, working on contingency plans for the region. "Our smartphones are flying off the shelves, with some outlets reporting 40%-60% sales growth, but that's distorting the overall trading outlook which is more challenging due to the weak global economy and a weak euro," said one Samsung exec.

Mobile devices comprise 70% of Samsung's earnings, and analysts predict Samsung could sell 19 million Galaxy S III phones this quarter and see profits grow another 36% in that period. Nevertheless, shares of Samsung fell 2% today, and have fallen 15% over the past two months. As one observer noted, "the bar's been raised so high that even in-line earnings disappoint some optimists." Other analysts noted that Apple's next iPhone, slated for release later this year, will also cut into Samsung's smartphone sales; though as the only producer of the processing chips that power Apple's device, its semiconductor earnings should rise.

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