The figure compares with the 6.7 trillion won average of analyst estimates here. “Unless that changes, it won’t be easy for Samsung to get back on an overall growth track”. According to Morgan Stanley, these profits were driven largely by a premium product mix, extensive cost control measures and currency gains. With $55 billion in cash, the company may be poised to offer consolation.
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On the currency market, the South Korean won joined most regional peers by strengthening against the dollar on renewed risk appetite.
For the third quarter 2014, Samsung posted an operating profit of 4 trillion won – a significant 49 percent drop from the 8.24 trillion won it reported for the third quarter a year prior.
Samsung released the Galaxy S6 Edge Plus and Note 5 in August.
Most of Samsung’s problems are its phone business.
“The falling portion of PC DRAMs, and sound profitability through the 20 nanometer technology has lent support to its chip business”, said Hwang Joon-ho, an analyst from Daewoo Securities Co.
Currently, the high-end smartphone market is dominated by Apple while the lower end is dominated by Xiaomi. Analysts expect this segment to report a 54% YoY increase in earnings, which are said to come in around 3.5 trillion won. Sales are estimated to be 12 trillion won.
A strong performance in the mobile chip market from Samsung has offset worries about its smartphone businesses, which is struggling amid intense competition from Apple, LG and a growing number of Chinese manufacturers also taking on more established brands. That three-month period wasmarked by price cuts for the S6 and curved-screen S6 Edge phones just months after their debuts. He also noted that Samsung is now in a stagnant period.
Samsung shipped about 81 million phones in the third quarter, according to the analyst survey. Sales rose 5.1 percent from the second quarter and operating profit 5.8 percent.
However, the company has a few positives as well. After seven quarters in a row when profits fell, the Korean company’s recent restructuring – shifting resources away from the tough smartphone market and towards chips and displays – seems to be delivering results.
Suwon, South Korea-based Samsung is now projected to report its first quarterly profit growth in eight quarters.
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A share buyback should happen anytime now because the earnings havent been performing well, said Dongbu Securities Co.s Yoo Eui Hyung, who topsBloomberg Absolute Return rankings for his calls on Samsung Electronics.
