Samsung Forecasts 79.8 Percent Increase In Q3 Profits
Samsung Electronics said it would post its first quarterly profit gain in two years, beating expectations as strong sales of chips and displays probably offset weakness in its smartphone division.
The South Korean tech giant estimated its July-September operating profit would leap 79.8% from a year earlier to 7.3 trillion won ($6.29 billion), compared with a 6.7 trillion won profit tipped by a Thomson Reuters Smart Estimate poll of 30 analysts.
While analysts attributed much of the earnings surprise to the weaker won, Samsung’s shares were on track for their biggest daily percentage gain in nearly 4 years in midday trade as investors saw an end to successive quarters of declining earnings.
“There were worries that overall earnings will continue falling as mobile profits declined, but now the numbers make the case that Samsung has the capacity to withstand weakness from the mobile business,” IBK Securities analyst Lee Seung-woo said.
The weaker won added about 300 billion won to operating profit, while cost-cutting and improved smartphone inventory management also probably helped, Dongbu Securities analyst Yoo Eui-hyung said.
The world’s No.1 maker of smartphones and memory chips guided for a 7.5% revenue increase for the third quarter, in line with expectations. It gave no further details about its performance, and will disclose full results in late October