Samsung's Q2 2012 earnings show $5.86 billion operating profit, that's a lot of Galaxy S IIIs

Samsung Electronics Announces Second Quarter 2012 Earnings Results

- Posts record operating profit of 6.72 trillion won on consolidated revenues of 47.6 trillion won

SEOUL--(Korea Newswire) July 27, 2012 -- Samsung Electronics Co., Ltd. today announced revenues of 47.60 trillion Korean won on a consolidated basis for the second quarter ended June 30, 2012, a 21-percent increase year-on-year.

For the quarter, the company's consolidated operating profit reached a record 6.72 trillion won, representing a 79-percent increase year-on-year. Consolidated net profit for the April-June period was 5.19 trillion won.

In its earnings guidance disclosed on July 6, Samsung estimated second quarter consolidated revenues would reach approximately 47 trillion won with consolidated operating profit of approximately 6.7 trillion won.

Samsung posted solid sales and maintained its profit streak in the second quarter across all business segments, excluding semiconductors, amid lingering global business uncertainties. Digital Media & Communications – comprising the Consumer Electronics and IT & Mobile Communications business sectors – accounted for 36.57 trillion won in sales, up 37 percent year-on-year.

For Device Solutions, the results were mixed. While operating profit for the Display Panel segment registered an on-year increase, the Semiconductor Business saw profits drop by 38 percent compared with the same period last year, despite outperforming the previous quarter.

By business unit, the Mobile Communications Business was one of the leading growth drivers in the June quarter with 20.52 trillion won in revenue. With the successful launch of this year's flagship GALAXY S III smartphone and robust GALAXY Note sales, the handset unit saw earnings jump by 75 percent from a year earlier.

The Visual Display Business also contributed to earnings gains with its diverse portfolio of TV models for both developed and emerging markets with 8.58 trillion won in revenue for the quarter.

"Despite a difficult business environment, we achieved stable profits in the second quarter through our differentiated products and competitive technology," said Robert Yi, Senior Vice President and Head of Investor Relations. "As we move into the second half, continued fiscal instability in Europe and its effect on the global economy will result in the possibility of a slower-than-expected recovery and intensified market competition."

Mr. Yi added that despite the economic uncertainties, "Samsung will enhance the competitiveness of our main businesses and reinforce our value-added, differentiated products as a means to improve earnings."

Overall, the third quarter is expected to be marginally positive as demand for consumer electronics goods, including smartphones and tablets, remains strong and a stream of new products hit the market. Supply for display panels is also expected to increase, as TV makers prepare for the year-end holiday season.

Capex 14 Trillion Won in First Half

Capital expenditure in the first six months was 14 trillion won, with 9.7 trillion won invested in the Semiconductor Business and 2.6 trillion won in the Display Panel segment. The total capex for the first half accounted for 56 percent of the annual capex budget of 25 trillion won planned for 2012. Capex for the first quarter was 7.8 trillion won.

Mobile AP Chips Sustain Growth

Samsung's Semiconductor segment – including the Memory and System LSI businesses – posted an operating profit of 1.11 trillion won on revenue of 8.6 trillion won for the quarter, which equates to a 6-percent year-on-year decline in sales.

Weak global demand for PC DRAM chips still weighed on Samsung's push for a recovery, although it responded to increased orders for server and mobile DRAM and hastened migration to the 30-nanometer and below process.

The NAND market picked up on higher OEM-related demand, improving quarter-on-quarter sales, particularly in solution products such as Solid State Drives (SSDs) for notebook PCs and Embedded Multimedia Cards (eMMC), but a steepening price decline hampered stable growth.

The System LSI Business, which creates application processors (AP) and image sensors for smartphones, is forecasted to maintain profitability in the third quarter as demand for faster and higher-capacity chips used in mobile devices increases.

Samsung will also look to gain a leading edge in the mobile AP business, following the recent announcement of our acquisition of CSR's mobile business and NanoRadio, which we expect to reinforce our already differentiated mobile AP technology.

In the third quarter, we anticipate a weaker-than-expected recovery in demand for PC DRAM due to lackluster back-to-school orders and intensifying competition.

In contrast, we expect market conditions for NAND to improve in the lead-up to the National Day and Black Friday holidays in China and the U.S., respectively. Samsung will continue to concentrate on value-added products such as server and mobile DRAM.

Display Panel Continues Improvement

The Display Panel segment recorded an operating profit of 750 billion won on revenue of 8.25 trillion won. This amounted to a 470 billion won increase in profit from the previous quarter and a 16-percent increase in sales compared to the same period last year.

Despite weaker than expected panel demand due to the economic slowdown in Europe and low seasonality, Samsung's total TV panel shipments increased in the low 10-percent range on-year due to strong sales of high, value-added products such as panels for 3D TVs and LED TVs.

Looking ahead, demand for TV panels is expected to grow in the next quarter as TV makers prepare for the end-of-year high-demand season and the Chinese National Day holidays. The effect of an energy saving subsidy in China is also expected to stimulate demand for LED TV products.

For the IT panel sector, the continuation of weak demand for panels used in notebook PCs and monitors was offset by strong demand for tablet PC panels. Launches of new smartphone products also contributed to continued profitability in OLED panels.

In the third quarter, economic uncertainty in developed markets and the sluggish market demand for notebook PCs and monitors is expected to dampen overall demand. The expansion and diversification of the tablet PC market, however, is forecast to fuel an increase in demand for tablet PC panels and Samsung will aim to expand sales of LCD and OLED panels for smartphones.

Sales of Smart Devices Lead Gains

The IT & Mobile Communications division, comprising Mobile Communications, Telecommunication Systems, IT Solutions and Digital Imaging, registered quarterly operating profits of 4.19 trillion won for the second quarter. Revenue reached 24.04 trillion won, and the mobile unit accounted for 20.52 trillion won, a 75-percent increase year-on-year.

The highly anticipated launch of GALAXY S III and upbeat sales of GALAXY Note, along with a more competitive average selling price (ASP) than the previous quarter, have cushioned an on-quarter operating loss brought on by the seasonably weak earnings of businesses in IT Solutions and Telecommunication Systems.

Handset shipments gained quarter-on-quarter and year-on-year, driven mainly by global orders for premium smartphones.

A sales decline in Long Term Evolution (LTE) wireless broadband technology equipment and slow demand for PCs and printers in the quarter will turn around in the July-September quarter with the expansion of LTE networks in developed countries and modest revenue growth in IT products.

The smartphone market, in particular, will continue to be profitable as consumers are given a wider choice of new products at a wider range of prices while orders from emerging markets increase.

In the third quarter, Samsung expects to further strengthen its leadership in the high-end smartphone market with the sales of GALAXY S III and also in the LTE equipment business with new devices.

TV Demand Boosts Profitability

The Consumer Electronics Division – encompassing the Visual Display and Digital Appliances businesses – posted revenue of 12.15 trillion won for the second quarter, a 7-percent increase year-on-year. The operating profit of 760 billion won represented an increase of 66 percent compared with the same period last year.

Although demand for TVs remained flat year-on-year, Samsung posted improvements in both shipments and profitability. Increased sales in developed markets for the company's premium TVs, such as the flagship ES7000 and ES8000 models, and expansion of region-specific LED TV models in emerging markets spurred a significant lift in earnings compared with the same quarter of last year.

This increase in demand saw Samsung increase its portion of LED TV sales from the mid 60-percent range to a mid 80-percent share, quarter-on-quarter.

Heading into the third quarter, although growth in developed markets may stall, Samsung aims to expand its presence in emerging markets with region-specific products and entry-level LED TVs. The company will also look to continue its leadership in Smart TVs in developed markets with continued cooperation with media and content providers.

As for Digital Appliances, sales of air conditioners rose on the back of strong seasonal demand and favorable market conditions in emerging markets. Moving into the third quarter, Samsung will focus on expanding sales of premium products and stabilizing overseas operations in the face of a possible slowdown in emerging markets and weak consumer sentiment in developed markets.

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ARM forms UK group to foster an Internet of Things, put 50 billion devices online by 2020

UK Technology Company ARM Forms First UK Industry Group to Combat the 'Internet of Silos'

UK Forum will create a technology blueprint for the 50-billion connected devices expected worldwide by 2020

LONDON--(BUSINESS WIRE)--ARM, the UK technology leader at the heart of many of today's electronic devices, today announced that it has invited some of the UK's leading specialist technology companies – EnLight, Neul, Alertme and AquaMW – to establish the UK's first industry forum to help shape the Internet of Things. The forum aims to combat what they describe as the 'Internet of Silos' - an unconnected world with less value to both consumers and businesses. The forum will drive a blueprint for how technologies associated with the Internet of Things should and could work together to support the 50-billion intelligent devices due to be connected to the Internet by 2020.

This coincides with ARM CEO Warren East speaking on the importance of mobile technologies and the UK's role in developing this market at the British Government's Business Olympics event in London from 26th July to 3rd August. The event is timed to showcase the UK contribution to international business during the Olympics, when the world spotlight is on the UK.

In 2020 everything that can benefit from an Internet connection will have one. In a similar way to people increasingly being online, every object will have a connection. This has huge potential to help use energy and natural resources more efficiently, manage our cities, monitor health more effectively and to improve lives. The Internet of Things represents a big opportunity to drive growth for both UK and worldwide economies. According to IMS Research*, governments will play a key role in defining the regulations that will propel shipments for M2M communications modules to more than 118 million units by 2016, especially in the automotive sector.

The forum's founding members are all involved in advanced technology and solutions associated with the Internet of Things, including commercial infrastructure monitoring, energy-saving street lighting, home automation, energy monitoring and low power radio technology for sensors. Their aim is to work together to develop public policies and standards designed to create the right framework to help governments and others ensure that the Internet of Things works properly, across the globe, and enjoys the confidence of consumers and businesses. The first forum will meet 24th August in the UK and will be chaired by the Gary Atkinson, who leads the Internet of Things initiative at ARM.

"In the next five years, over £2.4 billion will be spent in the UK on smart home energy management devices, ranging from smart meters themselves to in-home devices that are connected to them. This is a great example of an Internet of Things application, but is only a fraction of the market that will open up over the next 15-20 years," said Gary Atkinson, director of embedded, ARM. "There are massive opportunities for the UK and the industry as a whole in this market, but that requires a common approach to infrastructure and systems to enable the Internet of Things. The UK can lead this thinking and that's why we are establishing a forum to create a blueprint for success. Working with innovative ARM partners, such as EnLight , Neul, Alertme and AquaMW, is a good place to start."

*IMS Research – Government Regulations a Key Piece of the Cellular M2M Puzzle

More detail about the members:

Streetlight Revolution – ENLIGHT

* At a time when many councils are considering turning off one in every 10 streetlights to save money, the Enlight system delivers savings of up to 45 percent by improving the efficiency of street lights. If the eight million streetlamps in the UK were all to use the EnLight technology, this would save the UK one million tonnes of CO2 each year
* Each EnLight ballast provides soft start to increase lamp life, supports all types, makes and wattages of lamp so is truly universal and has an overall energy efficiency of 95 percent, compared to 50-60 percent for traditional magnetic versions. True linear dimmability in 1 percent increments means that the lights can be turned down after midnight – rather than off completely
* The ballast is also connected to the Internet so all the lights in each district (which could be a street or a whole village) can be managed from a central location. This enables the remote control of all streetlights, so they can be lit and dimmed from a central point, and faults can be detected and diagnosed from the office rather than an engineer having to go to each light

Home Energy Management – AlertMe

* SmartEnergy helps you identify your home's energy-hungry habits. See how much you are consuming, turn appliances off and watch your costs fall instantly. Personalised energy-saving tips protect your pocket and start reducing your energy costs long before the utility bills hit the doormat
* Founded in 2006, AlertMe is a Smart Home technology company providing home energy management and connected home services both directly to consumers and indirectly through partners such as Energy Utilities, Telecommunications companies and Retailers
* Based on a single cloud-based platform and an AlertMe hub in the home, AlertMe allows consumers to monitor, control and automate a wide range of devices in the home, related to energy consumption, heating & cooling, home monitoring and new energy sources like solar PV, online and via their Smartphone anytime, anywhere. In addition, AlertMe's data services provide consumers with greater insight into their energy use while providing recommendations on how to reduce their consumption or use their energy more efficiently

Intelligent Cloud Sensing - AquaMW

* The technology platform from AquaMW combines the efficiency of low power ARM architecture with massive scalability of Cloud computing to deliver unique Wireless Sensing Apps. These apps "sense" the physical world through real time data acquisition "predict" future events through real time analysis and provide tools for businesses and people to "act" resulting in improving efficiency and reducing environmental impact
* Their technology is being used by leading OEM's like Grundfos and other asset owners in commercial buildings, industrial and manufacturing sector to improve efficiency, implement new business models and transform their infrastructure
* Their vision is to unlock intelligence from the physical world around us by incorporating BRAINS to each asset and business process

Recycling the airwaves – NEUL

* Their vision is to bring about a revolution in the way devices and applications communicate. From the predicted 50 billion connected Machine-to-Machine (M2M) devices, through smart metering to rural broadband, transportation and beyond
* The space that was freed up from the digital switchover is exactly the space that Neul recycles as it is licence free TV white space spectrum within the existing global TV bands.
* The costs of spectrum, network infrastructure, back haul, maintenance & deployment have been minimised, allowing customers to build & operate their own Neul networks. The Neul architecture is based on the royalty free, open network standard, 'Weightless'

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Posted in: billion,devices,forms,foster,group,internet,online,Things