Published: Sun, October 07, 2018
Electronics | By Shannon Stone

Samsung reported record profits

Samsung reported record profits

Samsung Electronics has provided its earnings guidance for the third quarter of 2018, estimating record operating profits of about KRW17.5 trillion (US$15.5 billion) on consolidated revenues of approximately KRW65 trillion. The figure also came in slightly over market expectations of 17.1 trillion won, based on a survey conducted by Yonhap Infomax on 21 South Korean brokerages.

That would beat operating profit growth of 6 percent in the previous quarter when its Galaxy S9 device missed sales targets and competition from cheaper Chinese-made phones ate into margins for its mobile business.

For 2018, the company is forecast to earn operating profits of 65 trillion won, well north of the 53.6 trillion won from 2017, Yonhap reported. That compared with a 15.9 trillion won forecast from 11 analysts.

Why it matters: Samsung had a rare disappointing second quarter this year, but it seems that was only a blip. The numbers could potentially be even higher as well, as Samsung's guidance split the difference between the company's estimated range of 17.4-17.6 trillion won.

The group has recorded in recent years of solid results due to strong demand of memory chips fitted on the mobile devices and that has helped offset poorer performance in its mobile division.

The company will be pleased to see yet another record quarter, but it remains to be seen whether it can keep the momentum going throughout the following months.

Samsung Electronics, meanwhile, is anticipated to face a slight decrease in its operating profit for the fourth quarter in line with changes in global prices of memory chips, industry watchers added.

Samsung reported second-quarter operating profits fell almost 5% on quarter but increased 5.7% from the same period in 2017.

The company did not provide detailed data for each business division; as with Samsung, finalized earnings will be made public later in the month. More specifically the strides that Samsung has been able to make in smaller architectures appears to be yielding dividends.

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