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(LEAD) Samsung Electronics predicts record high operating profit for Q3

2017/10/13 08:54

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SEOUL, Oct. 13 (Yonhap) -- South Korean tech giant Samsung Electronics Co. said Friday that its third-quarter operating profit is expected to have nearly tripled on-year, apparently on the sound returns from its computer chip business.

Operating profit was estimated at 14.5 trillion won (US$12.8 billion), compared with 5.2 trillion won tallied a year earlier, the company said in a regulatory filing.

Sales also probably surged 29.65 percent to 62 trillion won in the July-September period from a year earlier.

The operating profit figure came in line with the market's consensus of 14.3 trillion won, compiled by Yonhap Infomax, the financial arm of Yonhap News Agency on 21 local brokerage houses.

Samsung did not announce the performance estimates of each business division, although the chip business is anticipated to have played a key role in the record-beating report. The company is set to release its final earnings report later this month.

The guidance report indicates the overall operating margin for the third quarter came to 23.4 percent, also setting a new record. Analysts said Samsung's strong earnings are attributable to increased shipments of chips.

"The shipment of DRAM and NAND products increased 12 percent and 21 percent (in the July-September period) on-quarter, while the average sales price also advanced 6 percent and 2 percent, respectively," said Kim Dong-won, an analyst at KB Securities Co., saying the operating profit of the chip division is estimated at 9.9 trillion won.

KB Securities added the rising sales of the Galaxy S8 and Galaxy Note 8 will also improve the profitability of the mobile division, putting the sector's operating profit estimate at a better-than-expected 3.3 trillion won.

Analysts said Samsung's chip business may have posted an operating profit of 10 trillion won in the third quarter, along with sales of 20 trillion won, putting the operating margin at above 50 percent.

Samsung raked in 8.03 trillion won from the chip business in the April-June period in operating profit, along with 4.06 trillion won from the mobile arm.

Shares of Samsung Electronics closed at 2,740,000 won Thursday, up 0.29 percent from the previous session. Samsung announced its earnings guidance before the market opened Friday.