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Samsung exceeds market expectations in Q3

Company performs better on rebounding phone, display sales

By Baek Byung-yeul

Samsung Electronics posted a better-than-expected operating profit during the July-September period, fueled by rebounding demand for smartphones and displays, the company said Tuesday. But it is continuing to struggle with falling semiconductor prices amid sluggish global demand.

According to its earnings guidance, the world's largest memory chipmaker logged a 7.7 trillion won ($6.4 billion) operating profit in the third quarter, down 56.18 percent from a year earlier. But it was up 16.67 percent from the previous quarter, as sales jumped 10.46 percent to 62 trillion won from 56.13 trillion won in the second quarter.

The figure beats the market consensus as analysts estimated the company would post 61.5 trillion won in sales and 7.1 trillion won in operating profit due to the fall in chip prices and low demand.

Though Samsung didn't break down the performances of each division, analysts estimated it recorded improved sales of smartphones and displays.

The IT and mobile division, which supervises the smartphone business, is forecast to post an operating profit of around 2 trillion won, roughly a 30 percent increase from the previous quarter, thanks to strong sales of the Galaxy Note 10 and budget Galaxy A series.

Also, the company supplied more displays to smartphone makers such as Apple as manufacturers are increasingly adopting OLED screens.

However, the analysts also expressed concerns over the future of the tech giant as it is inevitable that Korean companies will face growing uncertainties from the trade disputes between the United States and China and between Korea and Japan.

"Samsung posted a better-than-expected earnings report in the third quarter thanks to increased shipments of semiconductors and improved profitability of smartphones," said Yoo Jong-woo, a researcher at Korea Investment & Securities.

Predicting the future performance of semiconductors, which accounted for about 80 percent of the operating profit in 2018, the researcher added Samsung is expected to see a recovery in demand in early 2020.

The world's largest memory chipmaker posted an all-time record profit in the third quarter of 2018 on the back of strong demand for memory chips, but the company has struggled since the fourth quarter of 2018 due to price cuts and dwindling demand.

"Chip prices are expected to continue to decrease in the fourth quarter of 2019 due to high inventory levels, but the company will be able to enjoy a price increase effect starting in the first half of 2020. Chip demand for mobile devices and data center servers will begin to recover next year," Yoo said.
Company performs better on rebounding phone, display sales

By Baek Byung-yeul

Samsung Electronics posted a better-than-expected operating profit during the July-September period, fueled by rebounding demand for smartphones and displays, the company said Tuesday. But it is continuing to struggle with falling semiconductor prices amid sluggish global demand.

According to its earnings guidance, the world's largest memory chipmaker logged a 7.7 trillion won ($6.4 billion) operating profit in the third quarter, down 56.18 percent from a year earlier. But it was up 16.67 percent from the previous quarter, as sales jumped 10.46 percent to 62 trillion won from 56.13 trillion won in the second quarter.

The figure beats the market consensus as analysts estimated the company would post 61.5 trillion won in sales and 7.1 trillion won in operating profit due to the fall in chip prices and low demand.

Though Samsung didn't break down the performances of each division, analysts estimated it recorded improved sales of smartphones and displays.

The IT and mobile division, which supervises the smartphone business, is forecast to post an operating profit of around 2 trillion won, roughly a 30 percent increase from the previous quarter, thanks to strong sales of the Galaxy Note 10 and budget Galaxy A series.

Also, the company supplied more displays to smartphone makers such as Apple as manufacturers are increasingly adopting OLED screens.

However, the analysts also expressed concerns over the future of the tech giant as it is inevitable that Korean companies will face growing uncertainties from the trade disputes between the United States and China and between Korea and Japan.

"Samsung posted a better-than-expected earnings report in the third quarter thanks to increased shipments of semiconductors and improved profitability of smartphones," said Yoo Jong-woo, a researcher at Korea Investment & Securities.

Predicting the future performance of semiconductors, which accounted for about 80 percent of the operating profit in 2018, the researcher added Samsung is expected to see a recovery in demand in early 2020.

The world's largest memory chipmaker posted an all-time record profit in the third quarter of 2018 on the back of strong demand for memory chips, but the company has struggled since the fourth quarter of 2018 due to price cuts and dwindling demand.

"Chip prices are expected to continue to decrease in the fourth quarter of 2019 due to high inventory levels, but the company will be able to enjoy a price increase effect starting in the first half of 2020. Chip demand for mobile devices and data center servers will begin to recover next year," Yoo said.
Baek Byung-yeul baekby@koreatimes.co.kr


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