Samsung Electronics Co., Ltd., a South Korean electronics company, has reportedly announced its Q3 operating profit, recording a two-year high with its 58% hike.
This rise in profits has beaten the analysts’ estimates, which can be credited to the rapid recovery of the smartphone sales and high demand for chips from a Chinese technology company, Huawei Technologies.
As per the statement made by Samsung, the company has registered an operating profit of over $10.6 billion (12.3 trillion won) in the 3rd quarter of 2020. According to a Refinitiv SmartEstimate, the company was expected to record 10.5 trillion won, which would be the highest since it registered a revenue of 17.57 trillion won in the Q3 of 2018.
Samsung has further commented that its revenue is likely to increase by 66 trillion won Y-o-Y. Prior to releasing the detailed earning figures, the company has revealed a limited data in the recent regulatory filing.
CW Chung, Korea’s head of research at Nomura, has apparently stated that Samsung’s recent record high is mainly driven by the robust chip demand from Huawei, which can be considered a remarkable growth in the smartphone & home appliance business.
Moreover, the share price of Samsung previously increased by 1.2%, outperforming the benchmark Korea Composite Stock Price Index’s (KOSPI) 0.7% rise. In addition, the company’s smartphone shipments have jumped to around 80 million from 54.2 million in the Q2, due to the recovery of the smartphone industry from the disruptions caused by the COVID-19 pandemic.
Samsung’s overall chip business has come under the pressure of low memory prices. However, the product shipments have been considerably favored by the mounting demand for graphic chips, which are used in game consoles, as well as mobile chips from various smartphone makers including Huawei. Additionally, its home appliance business is likely to bounce back to normal from the coronavirus crisis.