Published: Sun, October 07, 2018
IT | By Emmett Cole

Samsung expects 20% profit increase in July-Sept quarter

Samsung expects 20% profit increase in July-Sept quarter

Samsung on Friday published its preliminary financial report for the third quarter of the year, estimating it generated the equivalent of $57.5 million in sales with approximately $15.5 billion in profit over the three-month period ending September 30. The previous high was 15.64 trillion won (13.8 billion US dollars) tallied in the first quarter of this year.

Analysts expect Samsung's mobile business will struggle to deliver profit growth for the next two quarters due to marketing costs in the premium smartphone segment and competition from cheaper Chinese-made models.

Samsung plans to curtail growth in memory chip output next year to keep supplies tight amid an expected slowing in demand, Bloomberg News reported last month.

Samsung Electronics gave earnings guidance for the third quarter, saying revenues climbed to KRW 65 trillion from 62.05 trillion the year before and 58.48 trillion in the previous quarter. It was up 11.2 percent from the prior quarter. The earlier market consensus on Samsung Electronics' operating profit was between 16.8 trillion won and 17.1 trillion won.

What will be interesting to see is if Samsung's smartphone business can stem the tide after seeing a 22 percent decline in revenue in the previous quarter.

The group has recorded in recent years of solid results due to strong demand of memory chips fitted on the mobile devices and that has helped offset poorer performance in its mobile division.

Operating profit in the IT and mobile unit, which makes smartphones, was estimated at about 2 trillion won (1.77 billion USA dollars) in the quarter on weak demand for Samsung's new flagship smartphones released this year.

South Korean flagships Samsung Electronics and LG Electronics announced surging Q3 year-on-year profits today. The sales estimates came to 15.8 trillion won.

Some global investment firms Goldman Sachs and Morgan Stanley cast grim outlooks on the global semiconductor market, which they said would be hit hard by falling demand in the fourth quarter and 2019.

Like this: