Samsung says profits have jumped 23%, probably thanks to high chip demand

The South Korean conglomerate announced on Tuesday that it expects an operating profit of about 8.1 trillion won ($ 6.8 billion) in the three months ended June. That’s almost 23% over the same period a year ago. Estimates have also fallen in price by about a 2% drop in profits that analysts surveyed data provider Refinitive predicted.

Samsung said it expects sales to fall about 7% to $ 52 trillion won ($ 43.6 billion). Analysts surveyed by Refinitive predicted 51.4 trillion in sales ($ 43 billion).

Shares in Samsung opened 1.5% in Seoul, before offsetting that gain. The stock was last traded at around 1.5%.

Samsung said the estimates “include a one-time gain related to the display business.” He did not process earnings, but he will present the complete results for the second quarter at the end of this month.

Samsung – which for companies like. Supplies key parts such as screens and discs Apple (AAPL) and Huawei – is among the first of the big tech companies to report earnings for the quarter, and its entire report will be viewed as a bell ringing time as technology giants survive a pandemic.

The company has enjoyed boosting its memory chip business thanks to Covid-19. Millions of people around the world continue to work, play games and watch movies from home, leading to high demand for data center chips, analysts say.

Sales of Samsung’s consumer electronics are a hit though.

Smartphone sales in the second quarter are likely to “drop to 55 million units,” Daiwa analyst SK Kim wrote in a note last month. That would be a drop of more than 27% over the same period a year earlier, according to the data IDC market research.

But analysts say the consumer electronics department, which includes sales of smartphones and televisions, is still profitable due to constant restrictions on work and travel.

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Kim, along with Lee Subin, an analyst at Daishin Securities, said that despite disappointing sales, Samsung’s smart unit was likely to enjoy higher profit rates because closing retail outlets means lower marketing costs.

Kim added that “reduced … internal costs, such as a business trip due to Covid-19,” also helped the lowest line of the smartphone department.

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