Samsung Electronics yesterday said its third-quarter operating profit likely jumped by a fifth to a record high, in line with market expectations, on demand from data centres and improved production yields.
Its operating profit came to 745.5 billion won (US$659 million) in the July-September period, compared to 516.1 billion won posted a year earlier, the company said in a regulatory filing. The operating profit soared to a record high of KRW 17.5 trillion from 14.53 trillion year-on-year and 14.87 trillion quarter-on-quarter.
Samsung Electronics is forecast to post a record operating profit in the July-September period thanks to its robust semiconductor sales, according to the firm's earnings guidance on October 5.
The company didn't provide a detailed breakdown of results yet, but analysts are ready to fill in the blanks. Its business likely won't experience any near-term effects of such a development and its stock should remain stable, or at least unaffected by lower profits that are likely to be generated over the final quarter of the year. Similarly, the chip business helped Samsung earn record profits over the previous year, even though the demand for memory chips continues to slow down worldwide. "Even when Samsung loses its handset market share, it still can grow thanks to its memory business". In addition to smartphones, OLED displays, and memory chips, the company has its tentacles spread into televisions, washing machines and dryers, refrigerators, IoT devices, and more.
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Sales for the third quarter were 65 trillion won, matching the average projection compiled by Bloomberg.
Analysts expect Samsung's mobile business will struggle to deliver profit growth for the next two quarters due to marketing costs in the premium smartphone segment and competition from cheaper Chinese-made models.
Price for memory chip, Samsung's best-selling product, was forecast to fall in the fourth quarter, while uncertainties lingered over the overall export amid the trade conflict among major economies.