Samsung expected to report biggest profit in two years

Smartphone and flatscreen giant Samsung Electronics Co is set to issue guidance for its best quarterly profit in two years on Thursday, when it releases estimates for its second-quarter earnings.

The recently-released Galaxy S7 and S7 Edge smartphones are thought to have given the firm a boost, with both devices in hot demand in a number of Samsung’s key markets.

According to a survey of 16 analysts conducted by Thomson Reuters, the South Korean behemoth is expected to indicate operating profit of KRW 7.8trn for the three months to the end of June.

If accurate, that will mark the highest quarterly figure since the company posted a profit of KRW 8.5trn in the first quarter of 2014.

The survey predicted that the mobile division could be answerable to KRW 4.3trn - or 54% - of the profits.

“Galaxy S7 sales are better than expected in the first half, and the semiconductor business is also outperforming rivals,” said KTB Asset Management’s Lee Jin-woo.

Lee added that Samsung was looking likely to report strong operating profit in the third and final quarters of this year, giving numbers of around KRW 7trn and KRW 8trn respectively.

Samsung has faced increasing competition from Apple at the top end of the smartphone market, and Chinese manufacturers such as Huawei and ZTE at the bottom end in recent years, though the S7 flagship range remains widely tipped to have ignited the boosters on the company’s finances this year.