Korean Economy News
Samsung Elec Q3 preliminary Op at $6.4bn, up 16.7 qtr to suggest chip recovery

By Kim Hyo-jin

Samsung Electronics Co. Tuesday projected improved performance in July-September period after losing nearly 60 percent so far in the year against record-high numbers of 2018, on signs of recovery in the chip industry and robust demand for its 10th anniversary premium phones.

The world's top memory chip and smartphone maker in its preliminary earnings release Tuesday reported an operating profit of 7.7 trillion won ($6.4 billion) in the quarter ended September, up 16.7 percent from the previous three months but still down 56.2 percent from a year ago period.

Sales reached an estimated 62 trillion won, gaining 10.5 percent on quarter and down 5.3 percent on year.

Against the year-ago period as of September, operating profit was 57.3 percent off at 20.53 trillion won and sales down 7.6 percent to 170.51 trillion won.

The third-quarter numbers fell at the upper end of market consensus of an average operating profit of 7 trillion won on sales of 60-63 trillion won.

It semiconductor division that was responsible for nearly 80 percent of the company's record earnings last year is projected to have passed the worst in the bust cycle amid easing in inventory levels and revived demand.

Memory chip prices, which have been in freefall since late last year from a supply glut, stopped their decline in September, suggesting initial signs of recovery. Global DRAM shipments in the final two quarters are also expected to surpass expectations, jumping 25 percent from the second quarter, according to market researcher DRAMeXchange.

Samsung's latest flagship smartphones are showing robust sales, with strong demand for the pricier 5G line of the Galaxy Note 10 series to have helped bolster its bottom line.

Mounting losses at its display business from the onslaught of cheaper Chinese LCD panels are expected to have been offset by the accelerated shift to the next-generation OLED panels.

The bellwether shares were lifted by the better-than-expected earnings. At 1:25 p.m. shares were up 1.15 percent at 48,300 won. Samsung Electronics releases final and detailed results for the third quarter at the end of the month.

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