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Samsung reports record $9.7 billion profit, buoyed by a 'memory super cycle'

By Daniel Petrov

Updated: Jul 27, 2017, 3:23 AM

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Samsung

Sales of the S8 beat the S7 last year, but higher component costs weighed slightly on Samsung's mobile profits

First, the numbers - Samsung made $12.7 billion of operating income and $9.7 billion of pure profit last quarter, the highest in the company's history. That's net income of about 18% on $54.8 billion of revenue, and a very healthy margin for a company that is in the fickle consumer electronics business. That's not the division where most of the profit originated, though, but rather Samsung logged a stellar quarter because of growing demand for its memory chips, OLED display panels, and other humble components it has been building capacity for in the last decade or so. Even with the company's head Lee Jae-yong awaiting bribery trial in detention, Samsung still managed to revamp its inner workings enough to satisfy all demand for its wares.

Buoyed by voracious requests for DRAM and NAND memory chips for everything - from servers to IoT connected devices - Samsung's semiconductor division alone was responsible for the whopping $7.2 billion in operating income on sales of $15.8 billion. That's about 60% of the total profits made by what analysts are already calling a "memory super cycle," but there was a decent contribution from something that is near and dear to our hearts as well - the mobile department.

It made Samsung $3.7 billion in operating profit, riding on the coattails of robust Galaxy S8 and S8+ sales that Samsung said are 15% higher than the ones of the S7 last year. That income is still a bit less than what Samsung Mobile generated in the same quarter last year, due to the design overhaul of the new flagship Galaxies, and the respective rise in component prices that went into the Infinity Display chassis.

Samsung is expected to beat Apple's profits for the second time in its history, but the spring and summer quarters are traditionally slower for the team from Cupertino, plus Samsung warned that profit for this quarter may be lower due to marketing expenses over the upcoming Note 8, and a higher share of midrange sales, after demand for its flagships has been satisfied and tapered off.

source: Reuters

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Daniel, a devoted tech writer at PhoneArena from 2010 to 2025, has been engrossed in mobile technology since the Windows Mobile era. His expertise spans mobile hardware, software, and carrier networks, and he's keenly interested in the future of digital health, car connectivity, and 5G. Beyond his professional pursuits, Daniel finds balance in travel, reading, and exploring new tech innovations, while contemplating the ethical and privacy implications of our digital future.