x
Breaking News
0

Samsung Elec on track for record third quarter as chips soar

TechnologyOct 12, 2017 10:53PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. A man stands at Samsung Electronic's store in Seoul

By Joyce Lee

SEOUL (Reuters) - Samsung Electronics (KS:005930) Co Ltd said on Friday its third-quarter operating profit likely nearly tripled from a year earlier to a new record, beating analyst estimates as strong memory chip prices fattened margins.

Samsung shares touched a fresh high of 2.74 million won soon after the market opened on Friday, on hopes for record 2017 earnings driven by soaring demand for memory chips with ever greater storage capacity.

"Memory chips have entered a brave new world. The rate of supply increase has slowed drastically, while demand has exceeded expectations, rapidly lifting prices," said Kim Woon-ho, analyst at IBK Investment & Securities.

"Although the share price has recently seen steep jumps, it still doesn't reflect all the forecast profit increases."

Brisk sales of the latest Galaxy Note 8 smartphone, launched in mid-September, lifted mobile profit as Samsung recovered from last year's costly withdrawal of the fire-prone Note 7 device, analysts said.

Samsung is also expected to announce a new shareholder return policy for the next three years as soon as the end of October, when it releases third-quarter results.

It is seen ramping up returns to a level higher than its current 50 percent of free cash flow, supporting its stock valuation, analysts said.

The Apple Inc (NASDAQ:AAPL) smartphone rival and global memory chip leader said third-quarter operating profit was likely 14.5 trillion won ($12.81 billion), compared with the 14.3 trillion won average of 20 analyst estimates in a Thomson Reuters poll.

Revenue likely rose 29.7 percent from a year earlier to 62 trillion won, versus the analysts' average forecast of 62.1 trillion won.

Samsung did not elaborate on its July-September performance and will disclose detailed results at the end of October. Analysts have tipped its chip division to propel the firm to record overall profit.

Strong global demand for DRAM chips will continue to outpace supply in 2018 as new plants from Samsung and No. 2 memory chip maker SK Hynix are not expected to operate until 2019, while demand for NAND flash chips exceeded supply for six straight quarters as of last month, DRAMeXchange, a division of data provider TrendForce, said.

Growing sales of organic light-emitting diode (OLED) smartphone screens for new Apple smartphones also have supported forecasts of a new earnings record in the fourth quarter.

Pre-orders for the Note 8 hit the highest-ever for the Note series, Samsung previously said.

Samsung shares were trading down 0.8 percent at 0022 GMT as investors booked profits, while the broader market was flat.

Samsung Elec on track for record third quarter as chips soar
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

 
Are you sure you want to delete this chart?
 
Write your thoughts here
 
Replace the attached chart with a new chart ?
Post
Post also to:
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
 
Replace the attached chart with a new chart ?
Post 1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
 
 
 
Add Chart to Comment
Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email