Samsung Electronics Q2 net profit falls 18%

South Korea's Samsung Electronics said Friday its second-quarter net profit fell 18 percent from a year earlier, amid weaker global demand for televisions and personal computers. The world's biggest maker of memory chips and flat-screen televisions reported net profit of 3.506 trillion won ($3.33 billion) compared to 4.28 trillion won a year earlier, and 2.78 trillion in January-March. Operating profit in April-June was 3.75 trillion won, down 25 percent from a record 5.01 trillion won a year earlier. Second-quarter sales were 39.44 trillion won, up 4 percent from a year earlier. The operating profit and revenue figures were in line with the earnings guidance the company published early this month. Samsung and other makers of memory chips and display panels have been hit by sluggish demand for most consumer electronics in developed nations due to the uncertain global economic outlook. Memory chip prices have also weakened compared to last year because of a global oversupply. The company's mainstay chip business saw a 40 percent drop in operating profit year-on-year. But rising sales of smartphones led Samsung's cellphone business to more than double its profitability. "Despite the challenging business environment and global economic uncertainties, we achieved continued year-on-year revenue growth in the second quarter, driven by mobile device sales -- particularly the success of our smartphones," Robert Yi, head of investor relations, said in a statement. Samsung said it expects demand for mobile handsets to increase by more than 15 percent in the second half as more users upgrade to smartphones. "In the third quarter, Samsung will continue to drive sales of the Galaxy S II and strengthen its product lineup with new mobiles featuring Long-Term Evolution technology," it said. However analysts said lingering global economic uncertainty, increasingly tough competition and the won's gains against the dollar would limit any major improvement in the company's bottom line this year. "The problem is the third quarter," Noh Geun-Chang, of HMC Investment Securities, told Yonhap news agency. "It won't be easy to increase operating profit." Yi said competition was expected to remain stiff in the third quarter and Samsung would "continue to enhance our cost competitiveness and technology leadership in the components businesses". South Korea's largest company said capital spending for the second quarter was 5.6 trillion won, bringing the total for the first half to 11.2 trillion won. It said its full-year projected capital spending of 23 trillion won remained unchanged, but resources may be shifted to boost investment in semiconductors and reduce it in the LCD (liquid crystal display) business. -- Dow Jones Newswires contributed to this report --