Profit

Samsung Electronics Expected to Record Best Quarterly Profit in 3 Years, Telecom News, ET Telecom



By Joyce Lee

SEOUL: Samsung Electronics Co Ltd is expected to achieve its best quarterly profit in three years and record revenue, thanks to rising memory chip prices and strong sales of its new foldable smartphones, analysts estimate.

The operating profit of the world’s largest memory chip and smartphone maker likely jumped to 16.1 trillion won ($ 14 billion) in the quarter ended September, according to a Refinitiv SmartEstimate of 16 analysts, weighted by those that are more consistently accurate.

This would be a 30% increase from 12.3 trillion won a year earlier and the highest since the third quarter of 2018. Revenue likely rose 11% to a record 74.6 billion won.

An unprecedented global shortage of semiconductor chips amid the pandemic has supported Samsung’s earnings and shares, which soared 45% last year and hit an all-time high in early 2021.

But the stock has fallen since then, compounded by losses in September when its U.S. counterpart Micron warned its memory chip shipments would decline in the near term, as the industry believes chip prices will drop after peaking in July. -September.

“Samsung shares fell due to Micron’s guidance, but unlike Micron, Samsung is internalizing major components… and has other businesses like mobile and foundry to support performance,” said Lee Soon-hak, analyst at Hanwha Investment & Securities.

“Memory (chip) prices are expected to rebound next year after a short period of decline,” added Lee.

Samsung will announce preliminary results on Friday.

CHIP DIVISION, SMARTPHONES

Samsung’s chip division to post operating profit of 9.9 trillion won, six analysts on average forecast, up 79% from a year ago, thanks to higher prices and shipments of memory chips.

Prices for DRAM chips, used in servers, mobile phones and other computing devices, jumped 7.9% from the June quarter, while those for NAND flash chips that serve the data storage market increased 5.5%, according to data from research provider Trendforce.

Analysts are also forecasting a double-digit operating margin for Samsung’s chip contract manufacturing business as customers rush to secure production capacity.

Its mobile division likely recorded around 3.7 trillion won in operating profit, analysts said, down from 4.4 trillion won a year earlier, but up from 3.2 trillion won in the quarter. precedent on sales of foldable smartphones.

It is estimated that 2 million Galaxy Z Fold 3 and Z Flip 3 models have been sold in one month since their launch in late August, with South Korea leading the way followed by the United States, said research analyst Jene Park. senior at Counterpoint.

Market players will look at Samsung’s full results later this month for an update on its planned $ 17 billion semiconductor plant after sources said it was getting closer to finalization.