Earnings from semiconductors, a business that supplies Samsung’s own devices and those of competitors including Apple, probably rose 54 percent to about 3.5 trillion won in the quarter, according to the median estimate of six analysts surveyed by Bloomberg News.
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Samsung did not provide earnings or sales figure estimates for each of its business divisions. But the world’s largest smartphone maker is still struggling to maintain its market share amid intense competition from Apple, Huawei and Xiaomi.
But brisk business in chips and displays has largely compensated for these difficulties. All eyes will now be tuning to see whether Samsung decides to enact a share buyback to boost its stock, which is still down about 8% so far this year. Quarterly operating profits fell to 4.06 trillion won during last year’s third quarter but recovered to 5 trillion by the fourth quarter.
Market watchers estimated that Samsung’s higher-than-expected earnings may have come from solid demand for small organic light emitting diodes (OLED) used for low- and mid-end smartphones.
The consumer electronics and display segments are estimated to have earned 300 billion won and 700 billion won, respectively, in the third quarter, analysts earlier said.
Samsung has lost about $22 billion in market value – roughly equivalent to a Nintendo Co.- this year as sales of the S6 and Note 5 devices sputter against new models from Apple Inc. and Chinese makers.
The share prices of Samsung, at the time of writing, were also on track for the biggest daily gain in nearly 4 years as investors welcomed the end to continuous quarters of declining earnings for the company.
It has been trying quite hard to fix its smartphone business, and has attempted several reforms, ranging from launching new products in different markets to even switching from plastic to metal and introducing curved screens.
“Samsung’s [third-quarter] earnings surprise, despite internal and external difficulties, should be highly appreciated”, said Lee Ka-keun, an analyst at KB Investment & Securities. The currency strengthened 1.2 percent in the past two and reached 1,161.82 on Tuesday, its strongest level since September 18, paring this year’s loss to 6.5 percent.
“Shipments of smartphones surged to 83 million units in the third quarter from 72 million units three months earlier”, said Hwang Min-sung, an analyst at Samsung Securities Co.
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Semiconductors and displays are behind Samsung upswing.
