Samsung forecast a strong lift in Q2 operating profit, boosted by strong component sales as well as the successful launch of its latest flagship smartphone – Galaxy S8.
In its official guidance, the company said it expects to report an operating profit around KRW14 trillion ($12.1 billion), compared with a Q2 2016 figure of KRW8.14 trillion, on revenue of KRW60 trillion compared with KRW50.94 trillion in the 2016 quarter.
The Wall Street Journal said the figure is likely to mean Samsung edged Apple to become the most profitable technology company during the period. From a smartphone perspective, the companies are at a different point in their roadmaps, with Samsung offering a new flagship while Apple’s iPhone is mid-cycle.
However, Samsung spent heavily marketing Galaxy S8, which is likely to have an impact on smartphone profitability.
Perhaps a bigger factor is that Samsung is benefitting from strong memory chip prices. Reuters said demand is likely to outstrip supply for these products for the rest of the year, boosting margins for suppliers.
The South Korean company is also expected to supply OLED screens to Apple for its next-generation iPhones later this year, while its own Galaxy Note 8 is expected to boost smartphone sales and rebuild this part of Samsung’s portfolio following the Note 7 debacle.
In addition to passing Apple as the most profitable tech company, it was suggested Samsung’s semiconductor sales may outstrip those of Intel during Q2.
The company recently announced a big investment in its components business, which is a key driver for profitability.
Samsung will provide a detailed breakdown of its performance when it releases its Q2 results later this month.