Sales of Galaxy S7 lead Samsung profit drive

Samsung’s Galaxy S7 smartphone led the rise in the company’s profit for the 2nd quarter of 2016. AP FILE

SEOUL, South Korea — Strong sales of its flagship smartphone and an aggressive cost-cutting drive saw Samsung Electronics post a 1.7 percent year-on-year gain in net profit to $5.2 billion in the second quarter.

The giant South Korean conglomerate said Thursday its key mobile division enjoyed “substantial earnings improvement” led by expanded sales of its high-end Galaxy S7 and S7 Edge phones.

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Industry trackers estimate that the world’s largest smartphone maker has sold about 26 million units of the S7 since it hit stores in March ahead of new launches by competitors, including arch-rival Apple.

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

Television and component sales were also strong in the April-June period, the company said in an earnings statement, with increased profits among premium product ranges.

“Looking ahead to the second half of 2016, the company expects its solid performance to continue… mainly driven by earnings increase in the component business due to sales growth in high value-added products,” the statement said.