Seoul, South Korea | AFP | Samsung Electronics expects profits to soar 72 percent in the second quarter to a record high, it said Friday, as it moves on from a recall debacle thanks to rising memory chip prices and increased demand for smartphones.
The South Korean tech giant estimated its operating profit for April-June at 14 trillion won ($12.1 billion), up from 8.14 trillion won a year earlier.
That would reportedly make it more profitable in the period than US behemoth Apple, where consensus analyst forecasts point to a profit of $10.6 billion.
“Samsung is believed to have topped the list of global IT companies, surpassing Intel and Apple, in terms of operating profits for the first time in history,” said Kim Dong-Won of KB Securities.
It would also be Samsung Electronics’ highest-ever quarterly operating profit, surpassing the 10.1 trillion won of the third quarter of 2013.
Samsung has benefitted from increased shipments and strong prices for DRAM and NAND semiconductor chips, as it put behind it last year’s Galaxy Note 7 recall fiasco.
It appears not to have been distracted by the corruption trial of its detained vice-chairman Lee Jae-Yong.
Brisk sales of its new flagship Galaxy S8 smartphones, rising demand for flexible OLED products as well as soaring LCD panel prices also drove its earnings, analysts said.
Samsung withholds sector-by-sector business performance until it releases its final earnings report later this month.
But Greg Roh of HMC Investment Securities told AFP: “All the three sectors — semiconductor business, display and smartphone business — are all believed to have performed well.
“This is a better-than-expected performance,” he added.
The earnings forecast surpassed a market consensus of around 13.2 trillion won compiled by FnGuide, a financial information service provider.
Sales for the April-June period are expected to surge 17.8 percent on-year to 60 trillion won.
– ‘Performing well’ –
Analysts expected the firm to continue to post strong earnings this year.
“Samsung will continue to generate quarterly operating profits hovering above 13 trillion won throughout the second half of this year,” Kwon Seong-ryul, a researcher at Dongbu Securities Co. said in a report.
He projects annual operating profits of 50 trillion won for 2017, up 70 percent from last year.
“The chip business is leading the overall performance, the display and smartphone sectors are also performing well,” Kwon said.
But Samsung shares closed 0.42 percent lower Friday in Seoul on profit-taking led by foreign investors.