Samsung beats Apple in Q2 profitability
[THE INVESTOR] Samsung Electronics outpaced Apple in terms of profitability despite its weaker-than-expected smartphone sales, helped by strong sales of chips, industry data showed on Aug. 2.
The Korean tech giant posted an operating-profit-to-sales ratio of 25.4 percent in the second quarter by posting sales of 58.4 trillion won (US$52.10 billion) and 14.8 trillion won in operating profit.
Over the April-June period, Apple posted sales of US$53.2 billion and an operating profit of US$12.6 billion, indicating its margin came to 23.7 percent.
The latest performance is significant as Samsung fell behind Apple by more than 10 percentage points in terms of the ratio in the second half of 2016. Samsung was 0.2 percentage point behind Apple’s 26 percent in the first quarter of this year.
Considering the trend, industry watchers said Samsung may outpace Apple in terms of the rate for all of 2018 as well.
Apple is anticipated to post sales of US$62 billion and an operating profit of US$15.8 billion for the third quarter, which translates into a ratio of 25 percent. Korean brokerage houses estimate 26 percent for Samsung Electronics.
With the chip business accounting for nearly 80 percent of the combined operating profit in the second quarter for the Korean tech giant, the direct comparison of the two companies does not necessary mean Samsung is more competitive in the smartphone segment as well.
The IT and mobile division, which oversees the smartphone business, posted an operating profit of 2.67 trillion won in the second quarter, falling 34 percent from 4.06 trillion won tallied a year earlier.
By Song Seung-hyun and newswires (email@example.com)