South Korean tech giant Samsung Electronics Co. is expected to post over 7 trillion won ($5.9 billion) in operating income for the second quarter ending on June 30 this year thanks to brisk mobile phone and display panel business.

According to market data provider FnGuide on Tuesday, analysts on average predicted Samsung Electronics to record 6.70 trillion won in second-quarter operating profit as of Monday. This is 15.3 percent jump from the previous estimate of 5.82 trillion won at the end of March or before the electronics company released the first-quarter earnings. The operating profit estimate for full-year was also adjusted upward by 13.3 percent to 26.35 trillion won from previous 23.26 trillion won.

As many as six brokerage companies believe the electronics company could report over 7 trillion won in April-June operating profit. Samsung Securities Co. raised up the outlook to 7.15 trillion won from previous 6.94 trillion won while Eugene Investment & Securities Co., Mirae Asset Daewoo Co., and Korea Investment and Securities Co. placed profit figures between 7.02 trillion won and 7.19 trillion won. The last time the company reported a profit of over 7 trillion won was in the third quarter of 2015 when it registered 7.39 trillion won.

Market experts see the IT and mobile phone business returning to drive growth for the company. The profit margin gained by 3 to 4 percentage points throughout all price range in its mobile phones, and the margin for low-end J-series shot up to between 8 and 9 percent in the second quarter from 4 to 5 percent in the same period last year, explained Hwang Min-sung, Samsung Securities analyst. He predicted the mobile phone division will be able to maintain a profit margin above 14 percent in the second quarter as it did in the first.

The display division that recorded loss in the first three months this year is expected to improve thanks to robust demand for lucrative organic light-emitting diode (OLED) display. The home appliance division is also expected to benefit from seasonal demand for air conditioners and coolers as summer nears. The release of new TV models also helped overall home appliance sales. The semiconductor division, however, is anticipated to record a drop in profits as dynamic random access memory (DRAM) chip price remained weak due to soft global demand.

By Noh Hyun

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