By Kang Seung-woo
Samsung Electronics is forecast to chalk up a record 15 trillion won ($13.2 billion) in its third-quarter operating profit on the back of the booming chip market and its recovering mobile phone earnings, according to brokerage houses, Wednesday.
The world’s largest chip and smartphone maker is scheduled to issue an earnings guidance Friday.
“Samsung’s third-quarter operating profit is expected to reach 15 trillion won along with its revenue of 62.3 trillion won,” said Lee Seung-woo, an analyst of Eugene Investment and Securities.
Kiwoom Securities analyst Pak Yu-ak echoed Lee’s view, forecasting that its upcoming quarterly results will be 15 trillion won in operating profit and 59.7 trillion won in sales.
The projections are beating earlier market expectations that Samsung is likely to see its figure go down in the July-September period after hitting an all-time high of 14.07 trillion won in the second quarter. It also racked up 9.9 trillion won in the first quarter.
The key driver behind another record profit will be its chip business whose profit is projected to surpass 10 trillion won amid the memory chip “super cycle.”
“Shipments of DRAM have increased by 13 percent and NAND by 21 percent, compared with the previous quarter, and their average selling prices are also likely to hike,” Lee said. DRAM is a significant part for desktop computers while NAND is the building block for mobile devices such as smartphones.
The expanding sales of its smartphones also contributed to the record earnings as it is tipped to record more than 3 trillion won.
Samsung launched the Galaxy Note 8 last month and its pre-orders reached 850,000, beating pre-orders of its predecessor Note 7’s 400,000. In addition, delays of Apple iPhone X, seen as the biggest rival to the Note 8, also helped the Samsung phone’s sales.
“The Note 8 phone has sold much better than expected, so the mobile division would post more than 3 trillion won in quarterly profits,” Yuanta Securities Korea analyst Lee Jae-yun said.
Samsung is expected to extend its record-setting streak to the fourth quarter as it is projected to report an operating profit of up to 17 trillion won during the October-December period, according to market researchers.