Samsung flags 23% jump in Q2 operating profit

SEOUL: Samsung Electronics Co Ltd flagged a 23% rise in second-quarter operating profit yesterday, beating analysts’ estimates on solid chip sales to data centres catering for a workfrom-home economy during the novel coronavirus pandemic.

The sales offset weak demand for smartphones and televisions, while one-off gains from its display business, which counts Apple Inc as a customer, also boosted profits, the company said.

The world’s top memory-chip and smartphone maker said operating profit was likely 8.1 trillion won (RM29.1 billion) in the quarter that ended in June, far above the 6.4 trillion won analyst forecast by Refinitiv SmartEstimate. It would be the highest quarterly profit since the fourth quarter of 2018.

Revenue likely fell 7% to 52 trillion won from a year earlier, Samsung added, giving only limited data in a regulatory filing ahead of its full earnings figures later this month.

Work-from-home orders and growth in online learning are underpinning chip demand amid the coronavirus pandemic and pushing up DRAM memory chip prices. US DRAM supplier Micron Technology Inc forecast strong quarterly revenue last month.

Analysts said the one-off display boost reflected a payment from Apple, with the US smartphone maker struggling to meet agreed shipment targets as iPhone sales take a hit from the pandemic.

The payment was estimated at 1 trillion won, bigger than a similar 800 billion won payment a year ago, they said.

The handset and TV business may have also fared better than expected due to lower marketing costs and as stores and factories resumed operations worldwide as countries lifted lockdowns aimed at stopping the virus, analysts said. – Reuters