Home » Samsung estimates its 3Q operating profit surged 80 percent

Samsung estimates its 3Q operating profit surged 80 percent

The mobile device maker projects Q3 sales to grow a few 7.5 percent to 51 trillion won, or $44 billion.

The decline of operating profit of Samsung for the second quarter was limited to around four percent, which is a lower percentage compared to the previous quarters. During the quarter, the South Korean won fell from Krw1,125 to 1,190 against the dollar, depreciating by 5.5% in value. Future growth may depend more on components than on competing with the iPhone. It is expected that this unit would report sales worth 27 trillion won.

The company in August added curved phone to its series with the launch of the Galaxy S6 Edge Plus, a bigger version of the Galaxy S6 Edge released earlier this year.

The average sales price is expected to have dropped by 14 per cent to about US$198 in the September quarter, Mr Lee said. Samsung shipped 72 million smartphones during 2QFY15, and 81 million smartphones during 3QFY15, according to survey conducted by Bloomberg. After that period, the company’s results started sliding.

Its semiconductor business was estimated to have performed well during the quarter on the back of predominant technological prowess in the nano-level making of DRAM chips and brisk sales of system LSI chips.

That is because as well as providing the chips for the company’s own handsets, Samsung’s semiconductor unit also makes the processors for a number of other companies – including Apple.

The won firmed 0.7 per cent to 1,164.6 per dollar. As latest premium phones are launched in the market, its semiconductor business still remains a top earner for fifth consecutive quarter.

“The smartphone division is on a gradual downward trend due to competition and commoditisation”, Nomura analyst CW Chung told the Financial Times.

Under the new pricing scheme, a 32 gigabyte Galaxy S6 is now available for 779,900 won from 858,000 won, while the price of a 64 gigabyte model is lowered at 799,700 won from 923,000 won. He also noted that Samsung is now in a stagnant period. Its finalized earnings will be announced later this month.

However, the company has a few positives as well.

Samsung has come under increasing pressure from shareholders to return a few of its $55 billion cash hoard though dividends or share buybacks. Samsung needs to regain at least $53 billion in dividend or share buybacks.

The operating profit forecast is above current analysts’ expectations. Diwali would be the flawless time, but coming quarter of course.

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Name: Lucas Mills

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