The new Galaxy smartphone charged Samsung Electronics Co. to a record quarterly profit of $5.9 billion, but executives still worry about the company’s performance in the jittery European market.
Samsung, the world’s largest maker of memory chips, mobile phones and flat-screen panels, does not seperate profits per division, but analysts believe that the jump in profits, up 79 per cent from the second quarter of 2011, is due almost entirely to the new Galaxy smartphone. The result, however, was shy of Samsung’s own forecast, resulting in the company trading at a two per cent loss yesterday in Seoul. The company has failed to keep up with demand for the Galaxy, causing delays in sales, and is in the midst of an intellectual property lawsuit with Apple that resulted in a temporary sales ban in the U.S.
Samsung’s biggest concern, though, remains Europe.
“Europe is our biggest consumer electronics market and we may have to initiate cost cuts and product price increases should the euro fall further from the current level,” an unnamed executive told Reuters. ”Our smartphones are flying off the shelves, with some outlets reporting 40-60 percent sales growth, but that’s distorting the overall trading outlook which is more challenging due to the weak global economy and a weak Euro.”