Samsung expects a similar level of phone sales in the third quarter

Samsung earned 3.13 trillion won ($2.71 bn; �1.46bn) in profit, up from 1.13 trillion a year ago but down from 3.14 trillion in the first quarter.

There were strong sales of memory chips and flat screens, but lower phone prices led to worries growth may slow.

Samsung said it expected to see LCD screen prices drop by 20-30% in the second half, which should boost demand.

'Spectacular'

The South Korean firm said price falls would be offset by the company's improved productivity and a new line designed to produce large-size LCD TVs.

Samsung Electronics' investor relations head Chu Woo-Sik said the second quarter results were "spectacular".

"All the business sectors of the company performed very well in the second quarter. In particular, the semiconductor sector was at its best."

He said handset sales for the third quarter would be similar to the level of the second quarter, with many major markets near saturation.

The company also expects demand for DRAM chips to grow by 16% on the back of stronger PC sales.