Samsung Electronics tips record second-quarter profit as memory prices surge

Samsung Share

Tech giant Samsung Electronics Co Ltd on Friday estimated a record quarterly operating profit for April-June, propelled by a memory chip boom that analysts say will continue to pad margins for the rest of 2017.

The Apple Inc. smartphone rival and global memory chip leader said second-quarter operating profit was likely 14 trillion won ($12.11 billion), compared with the 13.1 trillion won average of 19 analyst estimates in a Thomson Reuters poll.

Revenue likely rose 18 percent from a year earlier to 60 trillion won, also a quarterly record, versus analysts' forecast of 59 trillion won. The South Korean firm did not elaborate and will release detailed earnings in late July.

Another profit driver has also emerged in the form of organic light-emitting diode (OLED) displays. Samsung has a stranglehold on the market for the bendy, next-generation screens which are widely expected to be used for Apple's latest iPhones, due out by October.

Samsung shares were down 0.3 percent in early Friday trade, compared with a 0.2 percent fall for the broader market, as the strong earnings outlook was already priced in. The stock is up more than 30 percent this year and hovering near all-time highs.

Samsung said on Tuesday it would invest $18.6 billion to extend its lead in memory chips and next-generation displays, a move likely to ease shareholder fears that major decisions were on the backburner while Vice Chairman Jay Y. Lee fights bribery charges in court.

On the mobile front, sales prospects for the Galaxy Note 8 will be closely watched in the third quarter, after its predecessor was pulled from the market last year due to fire-prone batteries.

Samsung is preparing to unveil the handset in August, underscoring the firm's desire to continue the Note brand.

 

FAQs

Leave a Reply

Your email address will not be published. Required fields are marked *