Samsung Electronics on Thursday reported a smaller-than-expected increase in quarterly operating profit as lower sales to inflation-plagued smartphone makers hurt profits from server customers charging memory chips.
The world’s largest maker of memory chips and smartphones estimates that its profit rose 11 percent year-on-year to KRW 14 trillion (nearly Rs. 84,600) in the three months ended June 30 – the highest profit in the second quarter since 2018 – from KRW 12.57 trillion (about 76,000 crore) a year earlier.
The gain fell short of a Refinitiv SmartEstimate of KRW 14.45 trillion (about Rs. 88,000 crore).
Revenue is likely to have risen 21 percent from the same period last year to KRW 77 trillion (about Rs. 4.6 billion), Samsung said in brief preliminary results publicationin line with market expectations.
Samsung will release detailed earnings later this month.
Earlier Tuesday, it was reported that Samsung is likely to post its best April-June earnings since 2018, up 15 percent year-on-year, as continued demand for its memory chips from server customers offset lower sales from inflationary smartphone makers.
Operating profit for the world’s largest maker of smartphones and memory chips is likely to have risen to KRW14.46 trillion in the quarter, from KRW12.57 trillion about a year earlier, according to a Refinitiv SmartEstimate by 24 analysts.
Its chip revenue is likely to have risen 49 percent to KRW 10.3 trillion (about Rs. 62,500 crore), an average of seven estimates shows. The chip business accounts for about half of the South Korean tech giant’s earnings.
Regarding the overall outlook for global demand for memory chips, Park Sung-soon, an analyst at CAPE Investment & Securities, said US data center companies like Amazon, Microsoft, Google and Meta are expected to continue buying “to meet the growing demand for clouds Services”.
© Thomson Reuters 2022