Samsung Electronics expected to post $8.48 bil. operating profit for Q3

Samsung's flag flutters at Samsung Electronics' office in Seocho District, Seoul, July 17. Yonhap

Samsung Electronics on Tuesday estimated its operating profit for the third quarter at 12.1 trillion won ($8.48 billion), indicating a solid recovery in profitability amid an upcycle in the global memory chip market.

According to the company’s earnings guidance, Samsung is expected to post 86 trillion won in sales and an operating profit of 12.1 trillion won. This marks sales growing 8.72 percent and operating profit surging 31.81 percent from a year earlier.

The figures outpace the brokerages' consensus estimates of 84.16 trillion won in sales and a 10.17 trillion won operating profit. They would mark the company’s highest quarterly revenue and the first time in 15 months that Samsung’s quarterly operating profit has exceeded 10 trillion won.

As the figures are part of an earnings guidance released ahead of the detailed earnings call, the company did not provide a breakdown of business divisions' performances. However, brokerages widely assume that a recovery in its chipmaking Device Solutions (DS) division lifted overall profitability, driven by growing demand for advanced memory chips used in artificial intelligence (AI) servers.

The DS division is expected to post an operating profit of at least 5 trillion won — more than 10 times the 400 billion won recorded in the second quarter of this year.

Shinhan Securities analyst Kim Hyung-tae, who estimated the DS division’s third-quarter operating profit at 6.1 trillion won, said DRAM is likely to spearhead the overall improvement, with recovered sales of AI-specific high-bandwidth memory reflected in the results. NAND memory earnings are also expected to rebound on the back of rising demand for enterprise solid-state drives (eSSDs). Kim estimated that the average selling prices of DRAM and NAND products increased respectively by 7 percent and 6 percent during the third quarter.

The outlook for the chip division remains strong. According to market tracker TrendForce, both DRAM and NAND prices are expected to continue rising through 2026. DRAM prices are projected to climb 5 percent to 10 percent in the first quarter, as manufacturers focus on server chips, thus limiting non-server supply. NAND prices are also likely to rise by 3 percent to 8 percent in the same period, supported by growing demand for eSSDs used in servers.

Along with the DS division, the Mobile Experience division — which oversees Samsung’s smartphone business — is estimated to post an operating profit in the 3 trillion won range, backed by robust sales of its new foldable models, the Galaxy Z Fold 7 and Galaxy Z Flip 7, released in the third quarter. Samsung Display is also expected to announce an operating profit of 1.1 trillion won, buoyed by panel supplies for Apple’s iPhone 17 series.