Samsung Believes It Will Post Record Third Quarter Earnings

 @KukilBora
on October 04 2013 6:32 AM
Samsung
Samsung may see its third quarter earnings rising as recovery in memory chip prices may help it counter a slowdown in its smartphone business. Reuters

Samsung (KRX:005935) has estimated that the company will post a record operating profit in the third quarter of this year even though its quarterly earnings growth has apparently slowed. 

Samsung said on Friday that its growth is estimated to be between 22.8 percent and 27.8 percent from the 8.06 trillion won ($7.5 billion) in operating profit posted in 2012. However, that will be less than the 47.5 percent growth the company saw in the second quarter, the Wall Street Journal reported.

The South Korean technology giant expects that it will post an operating profit of between 9.9 trillion won ($9.2 billion) and 10.3 trillion won ($9.6 billion) for the three months period ended on Sept. 30. Samsung posted an operating profit of 9.5 trillion won ($8.86 billion) in the second quarter. 

According to Samsung, the company’s total sales are expected to be somewhere between 58 trillion won and 60 trillion won, which would be up by 11 percent to 15 percent from 52.18 trillion won last year. 

A Reuters report showed that the company's earnings guidance released on Friday, ahead of its final quarterly results due on Oct. 25, was better than the average forecast of 9.96 trillion won estimated by a poll of 34 analysts. The report said that Samsung could see its July-September earnings rise due to a strong recovery in memory chip prices, helping the company counter a slowdown in its smartphone business.

“The semiconductor and mobile divisions may have performed better than expected in the third quarter, helping Samsung post better-than-expected earnings,” Reuters quoted Choi Do-yeon, an analyst at Kyobo Securities, as saying. “We expect earnings to improve to 10.7 trillion won in the current quarter, as computer memory chip prices are rising thanks to the fire at the Hynix plant.”

According to analysts’ estimates, Samsung has shipped between 85 million and 89 million smartphones in the third quarter of this year, up from 76 million in the second quarter as the company increased shipments of cheaper handsets to emerging markets.

The company dominated the worldwide smartphone market in the second quarter with a 33.1 percent share of the entire market. Rival Apple (NASDAQ:AAPL) came in second place with 13.6 percent share of the global market, according to Strategy Analytics.

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