Smartphones power record $5.9bn Samsung profit

Samsung Electronics, the world's top technology firm by revenue, reported on Friday a record operating profit of $5.9bn (£3.7bn) for the June quarter, as rampant Galaxy S handset sales helped stretch its lead over Apple.

September quarter mobile profits are expected to forge further ahead as the latest Galaxy model enjoys a sales boom before the next iPhone launch, widely expected in October, driving Samsung's profit to a record of nearly 8 trillion won (£4.5bn). The mobile business brings in around 60 per cent of Samsung's earnings.

Profits of the handset division more than doubled from a year earlier and the flat-screen business swung to a profit as LCD prices stabilised.

Shares in Samsung, which also makes TVs and other appliances, flat-screens, and chips, jumped as much as 4.7 per cent to a five-week high after the results, outperforming the wider market.

"Solid results from the TV division show its resilience to the Eurozone crisis, while the mobile division has become a strong cash cow on the back of strong Galaxy sales," said Seo Won-seok, an analyst at Korea Investment & Securities.

"Weak memory chip prices remain the biggest concern for Samsung in the third quarter, but it will again fare better than rivals as its reliance on Apple, which tends to squeeze suppliers quite a bit, is small compared to the likes of Hynix and Toshiba. It'll have less margin pressure."