South Korean manufacturer Samsung Electronics has reached a record quarterly profit of $5.9 billion thanks to its Galaxy smartphone range. Despite a parts shortage, the company’s flagship Galaxy smartphones are making ground on rivals Apple and Nokia.
However all is not well across Samsung’s other businesses, as concerns over Europe’s debt crisis has affected the demand for televisions and home appliances. A report in Reuters revealed that although handset sales have more than doubled in profit growth, other businesses such as chips and consumer electronics are struggling with weak prices and demand. Europe is said to be the tech giants biggest electronics market, and the euro zone criss has been wreaking havoc on the companies bottom line.
“Europe is our biggest consumer electronics market and we may have to initiate cost cuts and product price increases should the euro fall further from the current level,” said one executive who preferred not to be named in the report.
“Our smartphones are flying off the shelves, with some outlets reporting 40-60 percent sales growth, but that’s distorting the overall trading outlook which is more challenging due to the weak global economy and a weak euro.”
The euro has fallen around 5 percent against the Korean won since April, and about 8 percent in the past year, to 2-year lows. Reuters.
Named the world’s most sustainable technology company in the 2011 Dow Jones Sustainability Index, Samsung Electronics is reported to be gaining market share in the TV making business, while Japanese rival companies Sony and Sharp have both reported significant losses. (Bloomberg).
Samsung Electronics announced last week its earnings guidance for the second quarter, 2012. With consolidated sales of approximately 47 trillion Korean won (approx. $40b AUD), and consolidated operating profits at 6.7 trillion won ( approx. $5.7b AUD), Samsung.