Samsung Electronics Likely to Report Best Quarterly Profit in 3 Years

Samsung Electronics is prone to flip in its greatest quarterly revenue in three years and a report income, on rising reminiscence chip costs and brisk gross sales of its new foldable smartphones, analysts’ estimates present.

Working revenue for the world’s largest reminiscence chip and smartphone maker doubtless jumped to KRW 16.1 trillion (roughly Rs. 10,000 crores) within the quarter ended September, in accordance with a Refinitiv SmartEstimate from 16 analysts, weighted towards those that are extra persistently correct.

That will be up 30 % from KRW 12.35 trillion (roughly Rs. 77,300 crores) a 12 months earlier and the very best because the third quarter of 2018. Income doubtless rose 11 % to 74.6 trillion gained (roughly Rs. 4,67,000 crores), a report excessive.

An unprecedented international scarcity in semiconductor chips amid the pandemic has underpinned Samsung’s outcomes and shares, which soared 45 % final 12 months and hit a report excessive at the beginning of 2021.

However the inventory has dropped since then, compounded by losses in September when US peer Micron warned its reminiscence chip shipments would slip within the close to time period, amid business views that chip costs will tumble after peaking in July-September.

“Samsung shares have fallen as a result of Micron’s steerage however in contrast to Micron, Samsung internalises main elements … and has different companies like cellular and foundry to buoy efficiency,” mentioned Hanwha Funding & Securities analyst Lee Quickly-hak.

“Reminiscence (chip) costs are seen rebounding subsequent 12 months after a brief interval of decline,” Lee added.

Samsung will announce preliminary outcomes on Friday.

Chip division, smartphones

Samsung’s chip division is prone to report an working revenue of KRW 9.9 trillion (roughly Rs. 61,970 crores), a mean of six analysts’ forecasts exhibits, up 79 % from a 12 months earlier, helped by rising reminiscence chip costs and shipments.

Costs of DRAM chips, utilized in servers, cellphones and different computing gadgets, jumped 7.9 % versus the June quarter, whereas these of NAND flash chips that serve the information storage market rose 5.5 %, knowledge from analysis supplier Trendforce exhibits.

Analysts additionally forecast a double-digit working margin for Samsung’s chip contract manufacturing enterprise as shoppers rush to safe manufacturing capability.

Its cellular division doubtless noticed about KRW 3.7 trillion (roughly Rs. 23,160 crores) in working earnings, analysts mentioned, down from KRW 4.45 trillion (roughly Rs. 27,840 crores) a 12 months earlier however up from the prior quarter’s KRW 3.2 trillion (roughly Rs. 20,020 crores) on foldable smartphones gross sales.

An estimated 2 million Galaxy Z Fold 3 and Z Flip 3 fashions had been offered in a month since launching in late August, with South Korea topping gross sales adopted by the US, mentioned Jene Park, senior analysis analyst at Counterpoint.

Market members might be scouring Samsung’s full outcomes later this month for an replace on its deliberate $17 billion (roughly Rs. 1,26,800 crores) US semiconductor manufacturing unit after sources mentioned it was drawing nearer to finalising the development.

© Thomson Reuters 2021

Are the Galaxy Z Fold 3 and Z Flip 3 nonetheless made for fanatics — or are they adequate for everybody? We mentioned this on Orbital, the Devices 360 podcast. Orbital is accessible on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

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