Samsung flags big jump in profit on strong S7 sales

Seoul : Samsung Electronics on Thursday flagged its biggest operating profit in more than two years, boosted by cost-cutting efforts and solid sales of its latest flagship smartphone.

The South Korean electronics giant -- also the world's top handset maker -- predicted an operating profit of 8.1 trillion won ($7 billion) in April to June, up 17 percent from 6.9 trillion won a year ago.

It is the company's biggest operating profit since the first quarter of 2014 and beat the average estimate of 7.4 trillion won from analysts surveyed by Bloomberg News.

Analysts attributed the better-than-expected figures to the firm's aggressive cost-cutting efforts and brisk sales of the Galaxy S7, the latest version of its high-end, flagship smartphone.

"Samsung's mobile unit is believed to have performed well thanks to robust sales of Galaxy S7s as well as an overhaul of its low- and mid-end handset line-up," said Peter Lee, analyst at NH Investment & Securities.

He estimated that in the second quarter the firm had sold more than 16 million units of the S7, which was introduced in March ahead of new launches by competitors, including Apple.

Samsung's mobile business accounts for the lion's share of the firm's overall profit, which has been increasingly squeezed by competition both from Apple's iPhone and by lower-end devices from Chinese rivals like Huawei.

Samsung shares rose 1.8 percent to about 1.45 million won in early afternoon trade.