Samsung Q3 2019 Earnings
According to reports, Samsung Electronics reported today that due to continued industry recession, chip prices fell, its third-quarter operating profit fell 56% year-on-year, but increased by 18% compared with the second quarter.
Samsung said its third-quarter operating profit was 7.8 trillion won (about 6.7 billion US dollars), slightly higher than the company’s previous forecast of 7.7 trillion won. In the same period last year, the company’s operating profit was 17.57 trillion won.
In the third quarter, the consolidated sales amounted to 6.2 billion won, compared with 65.46 trillion won in the same period last year. Net profit for the third quarter was 6.1 trillion won (about 5.2 billion US dollars), better than the average estimate of 5.5 trillion won for analysts.
Samsung’s profit is expected to improve as the memory industry is recovering from the long-term downturn. The Samsung smartphone business has experienced a series of setbacks in the past few years, but now it has benefited from the US government’s suppression of Huawei, and Apple’s iPhone 11 is increasing demand for Samsung Electronics’ most advanced displays.
“We are seeing an improvement in the chip industry,” said broker IBK Securities analysts in an interview on the 22nd of this month. “It is expected that DRAM memory prices will start to pick up in the third quarter of 2020. We expect demand for server chips to grow substantially. And new products for folding screen smartphones will become a new growth factor.”
Since this year, Samsung Electronics’ share price has risen more than 30%.
However, some analysts said that Samsung Electronics’ profit fell for four consecutive quarters and is expected to fall again this quarter.
The memory components used in smartphones and data centers are the main profitable businesses of Samsung Electronics.
Earlier this month, Samsung’s domestic rival SK Hynix said that 5G-enabled smartphones will help the global memory market out of the downturn next year.