Reuters file photo: The logo of Samsung Electronics is seen in its office building in Seoul, South Korea, August 25, 2017. Reuters / Kim Hong-ji / File photo
Written by Joyce Lee and Hikyong Young
CEO (Reuters) – Samsung Electronics Co., Ltd. on Friday reported 2 %% of third-quarter operating profit, the highest in three years, marking the rise in memory chip prices and sales of new flagship smartphone launches.
Preliminary results rose 2 %% from the second quarter, just below the forecast, although the market response was more nuanced as analysts expected a flat or slightly lower result this quarter to lower the price of the memory chip.
The world’s largest memory chip and smartphone maker estimates its July-September profit at 15.8 trillion won (13 13.3 billion), down from a Refinitiv SmartEstimate of 16.1 trillion won. This is the highest quarterly profit since the third quarter of 2018.
“Mobile business operating margins may be lower than market expectations,” said Park Sang-soon, an analyst at Cape Investment and Securities. “We need to look at the mix of marketing costs and the products sold by Samsung (KS :).”
Samsung’s chip contract manufacturing business has seen memory chip prices and shipments rise and profits rise, possibly boosting the chip division’s operating profit by almost %% over a year ago, analysts said.
In the first half of the year, half of Samsung’s operating profit was semi-conductive.
Shares of Samsung rose 0.4% early in the afternoon trade. It is due to announce detailed earnings later this month.
The stock has fallen nearly 12% so far this year and has risen 3% in the broader market, hurting in September when U.S. Peer Micron Technology Inc. (NASDAQ 🙂 said https://www.reuters.com/technology/us -chipmaker-micron-forecast -First-quarters-revenue-below-estimates-2011-09-2 its its memory chip shipment will slip in the near future.
Analysts said the price of memory chips is expected to fall this quarter due to lower demand for personal computers amid the expected slowdown in global lockdowns, which has helped sell electricity, and may also reduce smartphone shipments.
Next year, Samsung is expected to have a bright spot in the chip contract manufacturing business, which on Thursday announced plans to begin production of sophisticated, 3-nanometer chip designs in the first half of 2022, as it competes against industry leader Taiwan Semiconductor Manufacturing Company Limited. Advanced technology preempt and win clients.
For Samsung’s mobile business, sales of approximately 2 million https://www.reuters.com/technology/samsung-electronics-likely-report-best-quarterly-profit-3-years-2021-10-05 The demand for foldable handsets has shown that it has captured a wider market than last year, analysts said.
However, this was probably offset by marketing costs and higher material costs due to the global chip shortage.
Samsung’s display unit is likely to see key results as Apple Inc. (Nasdaq 🙂 increased orders ahead of the launch of the iPhone 13 series in late September, analysts said.
Overall revenue probably rose nearly 9% year-on-year to a record 73 trillion won, Samsung said in a filing.
($ 1 = 1,191.2500 won)
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