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Samsung's Q2 profit drops 26 percent due to sluggish TV sales, demand for phones explodes
You may or may not have noticed, but we're once again in the thick of earnings season, and today Samsung's in the hot seat. The company has reported that its second-quarter profit fell 26 percent year-over-year to 3.7 trillion won ($3.5 billion), largely thanks to underwhelming sales of flat screen TVs and, to a lesser extent, semiconductors. That's a shade worse than the whiz kids over on Wall Street were expecting, according to Bloomberg. In fact, the demand for televisions was so disappointing that it overshadowed what was actually an impressive quarter for the outfit's mobile division -- sales of feature and smartphones quadrupled year-over-year to 19.2 million units, putting the company on track to further narrow the gap with Nokia, the world's bestselling handset maker. All told, this balanced out to a modest growth in revenue -- an uptick of 2.9 percent to 39 trillion won ($36.7 billion).
Global rare earth supply deficit should turn into a surplus by 2013, Goldman Sachs says
It looks like rare earth elements are getting slightly less rare. According to a research note released by Goldman Sachs today, the world's rare earth supply deficit will probably reach its apex this year, before converting into a surplus by 2013. Goldman's analysts constructed their projections based on evidence that many Western companies have begun building their own mines, in response to China's overwhelming market dominance. Today, the People's Republic produces about 90-percent of the world's rare earth minerals -- a group of 17 elements that are used to manufacture many of the flat screen TVs, hybrids and cellphones we've come to know and love. Over the course of the past few years, China has only consolidated its hold on the industry, thanks to economic policies aimed at nationalizing private mines and implementing restrictive export quotas. As a result, global rare earth prices have skyrocketed, forcing mining companies in the US and elsewhere to look inward and harvest their own deposits. The only downside, however, is that even if global supply spills into a surplus within the next two years, prices probably won't cool down until 2015. But at least the horizon looks brighter than it has in recent months.
