Its operating profit has gained quarter to quarter for the past year since falling to 4.1 trillion won a year ago.
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In March, Dutch chip company NXP Semiconductors NV took the industry by storm after it announced a US$11.8 billion deal to buy Freescale Semiconductor Inc. The United States dollar was about 11pc higher against the won at the end of the quarter compared with a year earlier. Sales are estimated to be 27 trillion won. The Korean manufacturer has signaled in the previous year that it intends to pump up its chip sales to offset steadily declining growth and amped up competition in the global smartphone market.
Wednesday’s estimate, which comes ahead of audited results later this month, did not give a net income figure or a breakdown of divisional earnings.
However, this is largely on account of the company’s semiconductor division, which is “booming” at the moment, he said. 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. Operating profit and sales are also projected to grow sequentially. The weaker won added about 300 billion won to operating profit, while cost-cutting and improved smartphone inventory management also probably helped, Dongbu Securities analyst Yoo Eui-hyung said. He also noted that Samsung is now in a stagnant period. “But the latest earnings have proved component sales are strong enough to elevate its market valuation”, Park said. Display earnings rose owing to the increasing use of larger screens and rising display demand from China.
The third-quarter operating profit hovered far above the median forecast of 6.5 trillion won in a survey of 16 brokerage houses conducted by Yonhap Infomax, the financial arm of Yonhap News Agency. The company is under pressure to return a few of a cash pile of $53 billion through dividends or share buybacks.
On September 21 we posted a report titled “Things Look Gloomy Again for Samsung as Korean Analysts Cut Q3 Estimates”.
The overall sell-side is now bullish on Samsung shares. An earnings surprise is when a security company’s quarterly or annual profits significantly surpass analysts’ expectations. Diwali would be the flawless time, but coming quarter of course.
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The South Korean electronics giant has had a relatively rough time of it over the past two years, suffering year-on-year profit drops across each of the last seven quarters.
