South Korea’s tech giant, Samsung Electronics, saw an earnings surprise in the second quarter thanks to higher chip prices, a regulatory filing showed on Wednesday.https://scudnewsng.com
The preliminary figure for operating profit rose to 12.5 trillion won (11 billion U.S. dollars) in the April and June quarter, up by 53.4 percent from a year earlier.
It was the highest in 11 quarters since the third quarter of 2018.
According to the company, its revenue jumped by 18.9 percent to 63 trillion won (55 billion U.S. dollars) in the second quarter, logging the highest second-quarter figure in the company’s history.
The Net income and detailed earnings on each business unit will be announced later in July after an external audit and the board of directors’ approval.
The operating profit had beat market expectations of around 11.5 trillion won (10 billion U.S. dollars), which recently went up amid the higher price for semiconductors.
Operating profit for Samsung’s chip-making business was estimated at around 7.5 trillion won (6.6 billion U.S. dollars) for the second quarter.
It more than doubled 3.4 trillion won (3 billion U.S. dollars) tallied in the first quarter.
The price for DRAM chips used for PCs soared in double figures in April, marking the fastest increase in over four years. Since then, the price made no big changes in May and June.
The price for NAND flash memory chips rebounded in April and remained steady in May and June.
Some market watchers forecast that Samsung’s operating profit may reach 15 trillion won (13.2 billion U.S. dollars) in the third quarter thanks to the global chip market recovery.
Operating profit for the display panel unit was estimated at around 1 trillion won (878 million U.S. dollars) for the second quarter amid a higher price for liquid crystal display (LCD) panels.
The consumer electronics division’s second-quarter operating profit was estimated to slightly fall from the previous quarter’s 1.2 trillion won (1 billion U.S. dollars) on the back of higher marketing costs.
Operating profit for the smartphone manufacturing unit was estimated at some 3 trillion won (2.6 billion U.S. dollars) in the second quarter, down from 4.4 trillion won (3.9 billion U.S. dollars) recorded in the first quarter.
The decline was ascribable to weaker demand for Samsung’s flagship smartphone Galaxy S21 during the off-season second quarter.
Smartphone demand was estimated to have reduced in some of the countries amid the resurgence of the COVID-19 pandemic.
Market watchers expected Samsung to record as high as 15 trillion won (13.2 billion U.S. dollars) in operating profit with 70 trillion won (61.5 billion U.S. dollars) of revenue in the third quarter amid the continued rally in the global chip market.
