Samsung, in a regulatory filing, estimated its third-quarter profit at 7.3 trillion won ($6.29 billion), its first quarterly profit gain in two years and its biggest since the first quarter of 2014. After peaking at 10.1-trillion won in the third quarter of 2013, Samsung’s operating profit fell to 4.6-trillion won in the corresponding period of 2014 before recovering gradually.
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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.
Analysts also said Samsung’s chip division likely remained its top profit contributor for a fifth straight quarter due to new smartphone launches from a range of manufacturers, while display profits were probably helped by rising sales to clients such as Huawei Technologies Co Ltd.
As usual, the company provided preliminary highlights of its results and will publish the full, official figures, including net income and divisional breakdowns, later in the month. The US dollar was about 11 percent higher against the won at the end of the quarter compared with a year earlier.
The same analysts suggested that sales of the Galaxy S6 had “dropped significantly”, however, suggesting Samsung’s long-term struggles are not over yet.
Third-quarter operating profit from the two business units are expected to increase by 500 billion won from the second quarter, said Choi Do-Yeon, an analyst at Kyobo Securities.
He warned that the hike in Samsung shares seen Wednesday could end up being a “short-term event” if it turns out that the good results owe more to the currency factor than improved competitiveness in the IT and mobile communication division, which oversees smartphones.
According to multiple media reports, strong sales of chips and displays most likely mitigated the company’s weaknesses in the smartphone industry.
Samsung has been trying to defend its market share in the smartphone market by adopting curved displays and adding new software features.
Revenue rose about 7.5% to 51 trillion won in the quarter, the Suwon-based company said.
The guidance numbers for the three months to September beat expectations for a profit forecast of about 6.8t won and are up from 4.1tn won a year ago.
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In late July, Samsung reported its seventh consecutive quarter of decline in earnings, reflecting continued weakness in its flagship handset business.
