Samsung foresees strong third quarter financial results, no traces of sluggish Q2

Isaac Cain
October 7, 2018

The South Korean company said it's expecting to set a new record profit of about 17.5 trillion won ($15.8 billion) in the third quarter, up 20 percent from the same period a year ago.

The company said that it expects its operating profit in the three months will stand at 17.5 trillion won (US$15.50 billion), up 20.4 percent from 14.5 trillion won posted during the same period a year ago.

Samsung Electronics on Friday announced it broke the record for the highest profit in a single quarter, registering 65 trillion won ($57.5 billion) in revenue in the third quarter of 2018.

That would mark an acceleration on the 6% increase in operating profit reported in the second quarter when its Galaxy S9 smartphone fell short of sales targets amid tough competition from cheaper Chinese-made phones.

Although the guidance report did not give details on the earning performance of each business, market experts believe the company's record-breaking performance was due to the company's semiconductors. Full results are due to be released on October 31. The revenue is an over 20 per cent increase (year on year) and almost 12 per cent high from the first quarter of this year, apparently on the back of robust returns from its chip business.

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Nevertheless, analysts have sounded concern about the current lack of innovation in the smartphone industry. Chip costs are diving, and its up and coming foldable telephones probably won't have an enormous effect on its mobile business.

But it looks to be business as usual for the company in Q3.

If the estimate is right, Samsung's semiconductor division would log a new quarterly profit in the third quarter. However, falling prices for some electronic components could stunt further earnings growth.

The South Korean tech giant has seen profits soar in recent years largely thanks to solid demand for memory chips for mobile devices, which has helped offset weakening profits from its own mobile production. When compared to the third quarter, DRAMeXchange projected a 5 percent drop in the fourth quarter, sharper than earlier estimates of a 1 to 3 percent decline.

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