Samsung Electronics September-quarter profit has likely surged over a third, fuelled by increasing smartphone sales, plus a rush order of memory chips from China’s Huawei, analysts said.
Samsung, the world’s largest memory chip supplier, is scheduled to announce preliminary July-September operating profit and revenue on Thursday.
Gain likely rose 35% to 10.5 trillion won (approximately $7.04 billion) from precisely the exact same period a year before, based on Refinitiv SmartEstimate, derived from analyst quotes weighted toward those consistently accurate. Revenue likely rose 3%.
While Samsung’s overall chip business was muted, analysts said orders from Chinese smartphone maker Huawei Technologies likely propped up sales. Huawei is likely to have built stockpiles before US sanctions from mid-September prevented it from buying chips made with US tech without a license, analysts explained.
Last year Samsung’s chip company accounted for roughly half of its gain.
US rival Micron Technology Inc posted market-beating profit last month, likely helped by Huawei’s rush to secure stock, analysts said.
“Huawei’s emergency orders from late August drove up Samsung’s DRAM and NAND chip shipments, offsetting the effect of weak prices and limiting the drop in semiconductor profits for the quarter,” said analyst Song Myung-sup in HI Investment & Securities.
Costs of DRAM chips, which enable devices to multi-task, and of NAND chips, which store data, fell in July-September, revealed DRAMeXchange data.
Samsung’s smartphone gain, which accounted for one third of earnings last year, probably jumped as handset need rebounded following the COVID-19 pandemic curbed sales in the first half of 2020. Third-quarter smartphone prices likely rose 48% to 80 million from the next quarter, according to analysts and statistics by Counterpoint Research.
Gain at Samsung’s display business likely fell, hurt with a later-than-expected launch of customer Apple’s new iPhone. However, earnings from television sets and home appliances likely rose as Samsung sold more gadgets online and cut operating costs, analysts said.
Samsung is scheduled to launch detailed earnings figures later this month.
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Joyce Lee. Editing by Sayantani Ghosh and Christopher Cushing.
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