You are here: Home » International » News » Companies
Business Standard

Samsung likely to post 35% surge in Q3 profit as smartphone sales recover

Last year Samsung's chip business accounted for roughly half of its profit

Topics
Samsung Electronics | Q3 results

Reuters  |  SEOUL 

Photo: Reuters
Photo: Reuters

By Joyce Lee

SEOUL (Reuters) - Co Ltd's <005930.KS> September-quarter profit likely surged more than a third, fuelled by strong smartphone sales and a rush order of memory chips from Huawei Technologies Co Ltd [HWT.UL], analysts said.

Samsung, the world's biggest memory chip supplier, is scheduled to announce preliminary July-September operating profit and revenue on Thursday.

Profit likely rose 35% to 10.5 trillion won (£7.04 billion) from the same period a year earlier, according to Refinitiv SmartEstimate, derived from analyst estimates weighted toward those more consistently accurate. Revenue likely rose 3%.

While Samsung's overall chip business was muted, analysts said orders from Chinese smartphone maker Huawei likely propped up sales. Huawei is likely to have built stockpiles before U.S. sanctions from mid-September prevented it from buying chips made using U.S. technology without a license, analysts said.

Last year Samsung's chip business accounted for roughly half of its profit.

U.S. rival Micron Technology Inc posted market-beating profit last month, likely helped by Huawei's rush to secure inventory, analysts said.

"Huawei's emergency orders from late August drove up Samsung's DRAM and NAND chip shipments, offsetting the effect of weak prices and limiting the drop in semiconductor profits for the quarter," said analyst Song Myung-sup at HI Investment & Securities.

Prices of DRAM chips, which allow devices to multi-task, and of NAND chips, which store data, fell in July-September, showed DRAMeXchange data.

Samsung's smartphone profit, which accounted for one-third of earnings last year, likely jumped as handset demand rebounded after the COVID-19 pandemic curbed sales in the first half of 2020. Third-quarter smartphone shipments likely rose 48% to 80 million from the second quarter, according to analysts and data from Counterpoint Research.

Profit at Samsung's display business likely fell, hurt by a later-than-expected launch of customer Apple Inc's new iPhone. However, earnings from television sets and home appliances likely rose as Samsung sold more gadgets online and cut operating costs, analysts said.

Samsung is scheduled to release detailed earnings figures later this month.

 

(Reporting by Joyce Lee; Editing by Sayantani Ghosh and Christopher Cushing)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, October 07 2020. 08:19 IST
RECOMMENDED FOR YOU
.