Samsung Electronics reported a smaller-than-expected rise in quarterly operating earnings on Thursday as lower sales to inflation-hit smartphone makers dragged on profits from server customers loading up on memory chips.
The world’s largest memory-chip and smartphone maker estimated its profit rose 11 percent from a year earlier to KRW 14 trillion (nearly Rs. 84,600 crore) in the three months ended June 30 — its highest second-quarter profit since 2018 — from KRW 12.57 trillion (roughly 76,000 crore) a year earlier.
The profit fell short of a KRW 14.45 trillion (roughly Rs. 88,000 crore) SmartEstimate from Refinitiv.
Revenue likely rose 21 percent from the same period a year earlier to KRW 77 trillion (roughly Rs. 4.6 lakh crore), Samsung said in a short preliminary earnings release, in line with market expectations.
Samsung is due to release detailed earnings later this month.
Earlier on Tuesday, it was reported that Samsung is likely to turn in its best April-June profit since 2018 with a 15 percent year-on-year rise, as lingering demand for its memory chips from server customers offsets lower sales to inflation-hit smartphone makers.
Operating profit for the world’s biggest smartphone and memory-chip maker likely jumped to KRW 14.46 trillion in the quarter, according to a Refinitiv SmartEstimate from 24 analysts, from KRW 12.57 trillion roughly a year earlier.
Its chip earnings likely soared 49 percent to KRW 10.3 trillion (roughly Rs. 62,500 crore), an average of seven estimates shows. The chip business accounts for about half of the South Korean tech giant’s profits.
On the overall outlook for global memory chip demand, Park Sung-soon, an analyst at CAPE Investment & Securities, said US data centre firms such as Amazon, Microsoft, Google, and Meta are expected to continue buying “to meet expanding demand for cloud services”.
© Thomson Reuters 2022