Samsung Electronics 1st Korean firm to top W100 tril. in quarterly operating profit
Summary
Samsung Electronics estimated 107.4 trillion won in third-quarter operating profit on Thursday, becoming the first Korean company to surpass 100 trillion won in quarterly operating profit. The company also estimated 195 trillion won in revenue. If finalized later this month, operating profit would rise 782.5 percent year-on-year and sales 126.6 percent. Memory chips, including HBM4 and DRAM, were widely seen as the main drivers.
Key Facts
- The estimated operating profit exceeded brokerages’ consensus of 106.64 trillion won, while estimated sales were below the 200.64 trillion won forecast.
- Analysts estimated Samsung Electronics’ memory business generated around 110 trillion won in operating profit during the quarter.
- The quarter was believed to include the full-scale contribution of HBM4 sales for Nvidia’s next-generation Vera Rubin AI platform.
- DRAM prices continued rising at double-digit rates despite a slowdown from the previous quarter, while long-term agreements were seen as supporting earnings stability.
- The Device Experience Division, which handles finished products, was expected to post an operating loss for the second consecutive quarter.
A traffic light is seen at Samsung Electronics headquarters in Suwon, Gyeonggi Province, July 30. Yonhap
Samsung Electronics on Thursday estimated 107.4 trillion won ($80.28 billion) in operating profit for the third quarter, becoming the first Korean company to surpass 100 trillion won in quarterly operating profit.
In a regulatory filing, the company said its third-quarter operating profit and revenue are each estimated at 107.4 trillion won and 195 trillion won. If the figures are finalized when the company announces its full earnings results later this month, they would represent year-on-year increases of 782.5 percent in operating profit and 126.6 percent in sales.
The operating profit surpassed brokerages’ consensus estimate of 106.64 trillion won, though sales fell slightly short of the 200.64 trillion won forecast.
The earnings are particularly significant as they exceeded expectations despite concerns that the Korean won's sharp appreciation against the U.S. dollar from the previous quarter would weigh on profitability.
Samsung Electronics does not provide earnings estimates by business division in its preliminary guidance, but memory chips are widely seen as the main driver behind the record operating profit.
Analysts estimate that its memory business alone generated around 110 trillion won in operating profit. The full-scale contribution of sixth-generation high bandwidth memory 4 (HBM4) sales for Nvidia's next-generation Vera Rubin AI platform is believed to be reflected in earnings this quarter.
Conventional DRAM products are also believed to have performed strongly. Although DRAM price increases slowed from the previous quarter, prices continued to rise at double-digit rates, likely contributing to the earnings improvement.
In particular, the growing share of long-term agreements (LTAs), which can help cushion the impact of memory price cycles, is strengthening the sustainability of Samsung's earnings growth.
The company said during its second-quarter earnings call that LTAs were increasing, and analysts believe the trend continued in the third quarter.
In contrast, the company’s Device Experience Division, which handles finished products, is expected to post an operating loss for the second consecutive quarter.
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