Samsung’s Q3 earnings likely to surpass $5.8B

SAMSUNG Electronics’ thirdquarter earnings are in the limelight amid emerging signs of a recovery in demand for memory chips, according to industry sources on Thursday.

The South Korean tech giant is scheduled to announce its preliminary earnings guidance next week. Market analysts forecast it has posted an operating profit of more than seven trillion won ($5.8 billion) in the July-September period.

Shinhan Financial Investment predicted in a report that the tech giant will post 60.64 trillion won in sales with an operating profit of 7.04 trillion won in the third quarter.

The sales estimate is up eight per cent compared to the previous quarter while the operating profit will increase 6.7 per cent quarter-on-quarter.

However, the operating profit estimate of around seven trillion won is down 60 per cent year-on-year.

The company’s quarterly earnings are being viewed by analysts as a slight recovery, considering Samsung’s disappointing performance in the first half of this year.

The company posted around six trillion won in operating profit in the first two quarters this year.

“Backed by the recent recovery of the semiconductor market, expectations about an earnings surprise are on the rise,” said Kim Yong-koo, an analyst at Hana Financial Investment. “The third quarter is likely to be a turning point.”

According to the report by Shinhan, Samsung’s semiconductor division is forecast to posted 3.59 trillion won in operating profit, while the smartphone division is expected to report 2.04 trillion won.

The chipmaking unit’s profit is assumed to have jumped 5.5 per cent, due to increased shipments of. DR AM and NAND memory chips, which are expected to have expanded 26 per cent and 11 per cent.

“Supply uncertainties due to t he Japan’s export restrictions on key chip materia ls could f urt her af fect t he pace of restock ing [to f urt her cut inventor y levels],” t he report said. “Global factors t hat constrain chip supplies have secured downward r ig idit y, while demand is likely to improve.”