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Samsung to Have Strong Third-quarter Earnings in the Semiconductor Biz

IANS
IANS
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Analysts said that Samsung Electronics Co. is expected to report strong third-quarter earnings on the back of its semiconductor business and a weak won.

The South Korean tech giant was projected to log 16.3 trillion won ($13.8 billion) in operating profit for the July-September period, up 31.9 percent from a year earlier. In comparison, its sales were forecast to increase 12.2 percent on year to 75.1 trillion won over the period, according to the data from nine local brokerage houses compiled by Yonhap Infomax, reports Yonhap News Agency.

Compared with the previous quarter, Samsung’s third-quarter operating profit and sales were estimated to increase 29.7 percent and 18 percent, respectively.

Samsung, the world’s largest memory chip and smartphone producer, will announce its third-quarter earnings guidance next week.

Analysts predict Samsung’s semiconductor business once again anchored the company’s performance in the third quarter thanks to price hikes in memory chips and enhanced yield rates.

They expected Samsung’s chip business to log around 10 trillion won in operating profit for the third quarter.

Earlier this month, market researcher IC Insights predicted Samsung could log $22.32 billion in semiconductor sales in the third quarter and defend its status as the world’s biggest chip seller.

“For its chip business, profitability improvement through cost reductions played a big part,” said Kim Kyung-min, an analyst at Hana Financial Investment.

“That is possible due to enhanced yield of advanced nodes in the non-memory sector and cost reductions efforts in the 15-nanometer DRAM and 128-layer NAND flash products.”

With a strong chip business, analysts said the weak Korean won in the third quarter would have also contributed to Samsung’s third-quarter performance.

Analysts also expected improved earnings from Samsung’s display business due to seasonality and may post better than the second quarter when a one-time gain is reflected.

They estimated the display unit to log around 1.5 trillion won in operating profit

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