Samsung Electronics says it is expecting profits to hit an all-time high of 14.5 trillion won ($12.8 billion) in the third quarter
Seoul (AFP) - Samsung Electronics said Friday it expected profits to hit an all-time high in the third quarter, as booming semiconductor sales boost the South Korean IT giant.
The company estimated operating profits of 14.5 trillion won ($12.8 billion) in the July-September period, a record for quarterly profit and nearly three times the 5.2 trillion won earned a year earlier.
Sales are expected to have surged 29.65 percent on-year to 62 trillion won.
Samsung did not announce the performance estimates of each business division but its semiconductor business is widely believed to have contributed greatly to the record-beating report.
The company is set to release its final earnings report later this month.
Samsung has been seeking to move past a bribery scandal that saw the company’s de-facto head Lee Jae-Yong thrown into jail, and to overcome a damaging recall last year of its flagship Galaxy Note 7 smartphone over exploding batteries.
Lee, who was found guilty in August of bribery, perjury and other charges relating to payments made by Samsung to ousted president Park Geun-Hye’s secret confidante Choi Soon-Sil, is appealing his five-year sentence and says he is innocent.
“The results are good ones that largely meet market expectations”, Kwon Sung-Ryul of Dongbu Securities told AFP.
“The company has been riding a global semiconductor boom,” he said, adding the semiconductor business alone is believed to have contributed 10 out of the 14.5 trillion won operating profit.
Its information and mobile sector is estimated to have brought in three trillion won operating profit and the display business one trillion won.
Both shipments and prices of the company’s main products – DRAM and NAND memory chips – have been increasing over the past several months, he said.
The rising sales of its flagship Galaxy S8 and Galaxy Note 8 smartphones were also believed to have bolstered the profitability of the mobile division, analysts said.
Profits are expected to continue to rise, analysts say.
Yonhap Infomax data based on research from 21 securities firms also showed Samsung is expected to post an operating profit of 16 trillion won in the fourth quarter, up 74 percent from a year earlier.
Doh Hyun-woo, analyst at Mirae Asset Daewoo Securities Co. said in a report that the release of new models, including the iPhone X by rival Apple Inc. could weigh on the mobile business, but it will at the same time help Samsung’s parts business.
The consumer electronics division will also benefit from strong seasonal demand, he added.
Shares in Samsung Electronics were trading down 0.77 percent on heavy profit taking in mid-morning trade.