By Kim Yoo-chul
Samsung posted 39 trillion won in sales for the second quarter, with 3.7 trillion won in operating profit.
On a year-to-year comparison, sales were up 2.9 percent from a year ago but operating profit was down 26.2 percent.
The decline is blamed on poor performances in LCD and semiconductor businesses.
Samsung expects improved profit in the second half, as the demand for digital devices makes a seasonal rise.
Samsung usually reports stronger profit for the latter half on bigger demands for chip and flat-screen orders from Apple, Dell and Hewlett-Packard (HP).
During the first six months of this year, Samsung reaped 75.99 trillion won.
The combined operating profit in the first half was estimated to 6.65 trillion won, a decrease by 29.4 percent from a year earlier, the filing said.
``The estimates fared well considering further weaker expectations in the financial markets,’’ said Song Myung-seop, an analyst at Hi Investment.
``Samsung’s telecommunications division, which handles its smartphones, is looking good. Also, the price of value added computer memory chips is showing good moves, helping its semiconductor division,’’ said Shin Hyun-joon, an analyst at Dongbu Securities.
Samsung didn’t offer a breakdown of its earnings by division.
Analysts have no big questions that its flat-screen business will suffer from a weak demand specifically in the United States and Europe.
Samsung’s newly-launched upgraded Galaxy S II is selling well in its strategic key markets and analysts say Apple’s decision to delay the launch of the next iPhone, the iPhone 5, will also help the company.
``We don’t think Samsung’s display business will fall further in the coming quarters, although the outlook for the chip market is still uncertain on slower global economic recovery,’’ said Kim Jang-yeol, an analyst at Mirae Asset Securities.
Samsung expects its smartphone shipments this year will reach 60 million, with sales to exceed 20 million in the second quarter after sales of around 14 million in the first quarter.
But higher worries over patent battles between its overseas rivals are expected to hit its financial soundness, which is also bad news for Samsung stocks.
``Samsung is destined to pay a maximum amount of 430 billion won to Microsoft in royalties and that’s bad news,’’ HMC Securities said in a note to clients.
Amidst its battle with Apple over the design of its Galaxy line, Microsoft is demanding that Samsung pay licensing fees that would reportedly work out to $15 per Android-based device.
Samsung is known to be pursuing a smaller, $10 charge in exchange for deeper integration with Microsoft’s Windows Phone 7, sources directly involved with the matter said.
Samsung spokeswoman Chae Su-yeon said the company is taking proper action to minimize the effects of the charges.
Samsung sold 12.6 million smartphones and 90 percent out of the total used Android operating systems.
In April 2010, Microsoft and HTC of Taiwan jointly announced a patent deal that will provide ``broad coverage under Microsoft’s patent portfolio for HTC’s mobile phones running the Android mobile platform.’’
``Patents and business are totally different matters. Samsung’s legal teams will fully handle this. But the one clear thing is that we will be better in terms of earnings and profit in the latter half,’’ said a top Samsung executive, asking not to be identified.
Samsung said the recent estimates, based on International Financial Reporting Standards, are likely to differ from actual results because it hasn’t completed an audit.
Samsung is expected to announce actual numbers in the last week of July, company officials said.