Samsung Electronics on Thursday delivered a forecast-beating performance in the third quarter on its better-than-expected chip business and demand for its mobile and home appliance products amid the pandemic.
The world’s largest memory chip and smartphone vendor said its net profit amounted to 9.36 trillion won ($8.3 billion) in the third quarter, up 48.9 percent from a year earlier.
Operating profit jumped 58.8 per cent on-year to 12.35 trillion won in the third quarter of the year, marking its best quarterly performance since the third quarter of 2018, when it logged an operating profit of 17.5 trillion won.
Sales rose 8 percent on-year to 66.96 trillion won in the July-September period, its largest-ever quarterly sales, beating the previous record of 65.9 trillion won in the fourth quarter of 2017.
Samsung attributed its upbeat performance to firm demand for smartphones and consumer electronics, while its chip business benefited from rush orders from Huawei over US sanctions despite a decline in memory prices.
In India, the company became the top smartphone vendor in the July-September quarter after over two years with 24 per cent market share, while its arch rival Xiaomi was second with 23 per cent market share, according to Counterpoint Research.
But the South Korean tech giant predicted its fourth-quarter profitability to decline due to “weakening memory chip demand from server customers and intensifying competition in the mobile phones and consumer electronics sectors.”
Samsung expected the turnaround of server memory demand to happen in the first half of 2021, reports Yonhap news agency.
“Soft prices in server memory caused by customers’ inventory adjustments will likely weigh down the memory business despite stable demand for mobile and laptop memory,” Samsung said.
“Smartphone sales are likely to decline and marketing costs to increase due to the competitive market environment.”
Looking ahead to 2021, Samsung expected a recovery in overall global demand but emphasized that uncertainties still remain over a potential resurgence of COVID-19.
Samsung said its smartphone sales jumped nearly 50 per cent from the previous quarter with the launch of new flagship models such as the Galaxy Note20 and Galaxy Z Fold2 and robust sales of mass-market models in key regions including India.
Samsung’s mobile business aims to expand foldable and 5G model offerings globally, while its display panel business plans to launch new quantum-dot displays next year.