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Samsung Expects Profit for Third Quarter to Reach Record High

07 October, 2018, 15:46 | Author: Rafael Roberts
  • 54-samsung-galaxy-s9-and-s9-plus

Sales for the July-to-September quarter are expected to reach 65 trillion won, the world's largest maker of smartphones and memory chips said in a regulatory filing.

Samsung Electronics announced its earnings for the third quarter, the company earned approximately 57,5 billion dollars. The guidance range is also above KRW58.48 trillion in the prior quarter. That beat the previous record of 15.6 trillion won in Q1, 2018.

That said, the semiconductor business has been a very strong performer for Samsung through the last couple of quarters, and some might suspect this is the case once again.

Why it matters: Samsung had a rare disappointing second quarter this year, but it seems that was only a blip. The operating profit to sales ratio came to 26.9 percent, also a record high.

Local analysts estimate Samsung earned around 2.3 trillion won in operating profit from the IT and mobile division, which marks a sharp drop from around 3.3 trillion won posted in the same period previous year.


Chips account for almost 80 per cent of Samsung's operating profit and Samsung has benefited from a surge in data centres for cloud computing that has spurred spikes in prices for DRAM chips. Ltd. (Korea: SEC)'s chips business has traditionally accounted for about four fifths of its operating profits.

While the company hasn't yet broken down the finances behind this monster quarter, Daiwa Capital Markets analyst SK Kim claims that Samsung's work on the new iPhones has been a major profit driver.

The firm did not elaborate on its performance and will disclose detailed earnings in late October. Samsung Electronics launched the Galaxy Note 9 in August, but intensifying competition in the global market, especially by Chinese rivals, weighed down on the South Korean tech giant.

Chips represent close to 80% of the operating profit for Samsung and the company has been the benefactor of a surge by data centers for cloud computing that spurred on spikes in DRAM chip prices.

Samsung can weather slowdowns in particular market segments because it's invested in so many different ones. ZDnet later reported that it expects chip profits to make up at least 70 percent of the total for this quarter.

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