Samsung Electronics profits increased by 58% in the third quarter
- 8th October 2020
- Posted by: Hakeem
- Category: Company Results
Samsung Electronics a multinational conglomerate disclosed that it had an increased profit of 58% from July – September compared to what it had recorded the previous year.
The company made 12.3 trillion Korean Won in the Quarter higher than 7.78 trillion made the previous year according to the company’s earnings guidance.
Samsung seems to have gained a lot from the U.S. sanctions on Huawei and the delayed announcement of Intel’s next-generation chips. The sanctions on Huawei restrict options to acquire chips for its smartphones and critical semiconductor parts.
The company can dominate additional market shares if Huawei goes out of memory chips. Mark Newman, senior analyst at Bernstein stated because both companies run on Google’s Android operating system, users could opt for another Android-based brand. “So I think smartphones, telecom equipment and a bit of semiconductor are the main reasons for the beat,” he said.
Another factor that could have contributed to this is the high demand for smartphones. The flagship smartphones of the company are selling well. Samsung Consolidated sales were approximately 66 trillion won for the quarter, up about 62 trillion won last year.
“I think a large part of it seems to be smartphone units were up a lot. We did have a chance to talk to the company briefly this morning and seems like the smartphone units have been very, very strong in Q3,” Newman stated.
On Thursday its shares sold low at 0.33% following South Korea’s benchmark index of 0.16%. Between April – June it had about 23% increase in profit.
Consumer electronics and appliances are other factors that could have contributed to Samsung’s earnings. SK Kim, executive director at Daiwa Securities explained on CNBC’s “Squawk Box Asia” that the upgrade in the cost structure, transfers to online marketing, considering the coronavirus pandemic and high demand, all helped in strengthening the company’s earnings.