Samsung says profit likely surged 53% in Q2 earnings guidance
Revenue rose an estimated 19% from the same period a year earlier to 63trn won
Samsung Electronics has reported a 53% rise for its guidance in second-quarter operating profit amid high chip prices and demand, despite lower smartphone sales, with the preliminary result up 33% from the first quarter.
The world’s largest memory chip and smartphone manufacturer said operating profit for the quarter ending 30 June was likely 12.5trn Korean won ($11bn), well above a Refinitiv SmartEstimate of 11.3trn won and up from 9.38trn won in the first quarter.
If confirmed later this month in its more detailed earnings figures, it would be the tech giant’s biggest second-quarter profit since 2018.
Meanwhile, revenue rose an estimated 19% from the same period a year earlier to 63trn won, Samsung said, but is down from 65.39trn won in the first quarter.
Chip and semiconductor business
For the second quarter, Samsung’s chip division profit likely jumped by a fifth or more from a year earlier, analysts said, due to strong memory chip prices and demand for consumer electronics and from data centre customers.
In its first-quarter results, Samsung said that in the second quarter, earnings at the semiconductor business were expected to increase as “memory market conditions improve on the back of strong server demand”. The semiconductor business posted 19.01trn won in consolidated revenue and 3.37trn won in operating profit in the first quarter.
Samsung’s memory chip shipments, in particular for DRAM chips, which are broadly used in servers, mobile phones and other computing devices, were larger than expected, contributing to chip profits.
Profits at Samsung’s chip contract manufacturing and logic chip design businesses were likely to have improved, too, as operations at a factory in Texas resumed after it was hit by a storm, analysts said.
For the second half of the year, Samsung said market conditions are expected to improve for the component business, with the company continuing to extend product and technology leadership. In smartphones and consumer electronics, the company said it will focus on “strengthening the premium category leadership”.
However, global macroeconomic risks, including uncertainties over demand related to COVID-19, are likely to continue, the company said.
In the second quarter, Samsung said it expects to “improve earnings significantly amid favourable business conditions, which include strong demand across all applications”.