Samsung’s third quarter results expected to touch new heights.
Despite Samsung’s Galaxy Note 7 fiasco, analysts have found that this is likely to be Samsung’s best quarterly profits in nearly 3 years. An aggressive sales strategy for its memory chips have eased the pains of the expensive failure of its flagship smartphone.
With reports of its flagship Galaxy note 7 catching fires, Samsung had discontinued the sales of the phone and had issued a warning stating that the issue is likely to cost it $2.1 billion from its fourth quarter profits.
Analysts and investors are however betting that the sales of OLED screens used in tablets and smartphones as well as the sales of memory chips is likely to translate to stronger earnings for Samsung for the October-December period.
According to Thomson Reuters StarMine SmartEstimate, Samsung’s operating profit is likely to rise for a second straight quarter to $7 billion (8.4 trillion won).
“We look for the memory business to post a big earnings improvement and contribute 50 percent of its (Samsung’s) total operating profit for Q416,” said Daiwa in a report.
With consumers demanding beefier configurations in smartphones, the sales of memory chips have spiked recently.
In the chips segment, the sales of high-end 3D NAND chips have in particular lent a helping hand to Samsung, and allowed it to surge ahead of rivals such as SK Hynix and Toshiba Corp.
In a report, Eugene Investment has stated that profits from Samsung’s semiconductor units are expected to touch a 4.5 trillion won for the 4th quarter and 13.1 trillion won for 2016.
Earnings from chips are likely to significantly grow even more this year, reads the report from Eugene Investment.
Park Jung-hoon, a fund manager at HDC Asset Management also agreed that Samsung’s chip business looks “pretty solid”.
“We’ll have to see how the mobile business does … but I think Samsung’s operating profit should be able to come in somewhere around mid-30 trillion won range (this year),” said Park Jung-hoon.
($1 = 1,206.1500 won)
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