South Korea based Tech giant Samsung Electronics Co Ltd. (005930) reported its third quarter results of the year posting the best quarterly Operating profit in the past two years in the quarter.
In the third quarter ended September 30 Samsung reported an operating profit of 12.35 trillion won ($11 billion) denoting a 59% increase. It’s also in same quarter Samsung recorded quarterly smartphone profit of 4.45 trillion won ($4 billion) making it the highest since 2014.
Despite the good third quarter results, the company now expects a profit decline in the fourth quarter citing declining server chip demand and increasing smartphone competition. In an earnings call, Samsung’s executive vice president of investor relations Ben Suh said they have a recovery plan in place but possibility of additional waves of COVID-19 could alter them.
“Global demand is forecast to increase year on year, but uncertainties are unlikely to ease given the possibility of additional waves of the pandemic,” said the executive vice president.
A while back Samsung unveiled its recovery plan for its smartphones and memory chips in the markets. The plan is set to run through next year and it will help it recover from disruptions caused by the pandemic and the prolonged trade war between China and United States.
The company is looking forward to have a gradual recovery in the smartphone market next year. It expects mobile chips to have a solid growth in the first half while demand of server DRAM may rebound.
Samsung’s revenue increased by 8% to 66.96 trillion won in the third quarter while its net profit jumped by 49% to 9.36 trillion won. The company said memory chip demand business might be affected due to changes in the inventory.
“Soft prices in server memory due to customers’ inventory adjustments will likely weigh down the Memory Business despite stable demand for mobile and laptop memory,” said Samsung.