Samsung says soaring smartphones sales pushed its quarterly operating profits to a record SKW6.7 trillion (USD5.9bn) in Q2, according to its earnings guidance for the three months to the end of June. Although it isn’t due to release full second-quarter results until the end of July, the firm says operating profits will be up 79% year on year, boosted by the strong performance of its recently released flagship device the Galaxy S III. Samsung estimates that revenues hit SKW47 trillion (USD41.3bn), slightly below analyst estimates due to weaknesses in its consumer electronics and chip divisions. 

The guidance suggests that Samsung is forging ahead in the smartphone market, with analysts expecting sales to top 50m in the quarter. While the firm is not breaking out earnings for each division, analysts estimate its smartphone profits are likely to have more than doubled to SKW4.4 trillion (USD3.9bn). Samsung no longer releases actual sales figures but the firm has said it is on course to ship 10m of its flagship smartphone by the end of July, with that figure pegged to rise to 19m in the current quarter. However, the firm, which currently leads the global smartphone market, is likely to face renewed competition towards the end of the year, with Apple widely expected to launch the next iteration of the iPhone in September.

While the next iPhone could slow Samsung’s smartphone growth, it will boost the firm’s semiconductor business. The South Korean firm is the exclusive producer of the chips that power both the iPhone and iPad, as well as providing Apple with memory chips and displays. But in Q2 its chips division struggled due to weaknesses in the European economy, Samsung’s biggest market. Low prices, slower demand and a weak Euro all ate into the firm’s bottom line in the quarter, with Samsung executives reportedly meeting this week to discuss the euro zone crisis.

“Europe is our biggest consumer electronics market and we may have to initiate cost cuts and product price increases should the euro fall further from the current level,” says a Samsung executive talking to Reuters. “Our smartphones are flying off the shelves, but that’s distorting the overall trading outlook, which is more challenging due to the weak global economy and a weak euro.”