Samsung's quarterly profit tops estimates

Samsung's results, which include the first full quarter of sales from its marquee S8 smartphone, show it is continuing to benefit from higher prices for memory chips.
Samsung's results, which include the first full quarter of sales from its marquee S8 smartphone, show it is continuing to benefit from higher prices for memory chips.PHOTO: AGENCE FRANCE-PRESSE

SEOUL • Samsung Electronics topped analysts' estimates with its best operating profit, as global demand for semiconductors remained strong and the new Galaxy S8 smartphone won over customers.

Operating income rose to 14 trillion won (S$16.7 billion) in the three months ended June, the company said in preliminary results released yesterday. That compares with the 13 trillion-won average of analysts' estimates compiled by Bloomberg. Revenue rose to 60 trillion won, compared with the 58.4 trillion won projected.

The world's largest maker of cellphones and memory chips is counting on the S8 to repair its reputation and regain ground lost to Apple and Chinese rivals following the demise of the Note7 last year.

Samsung's results, which include the first full quarter of sales from its marquee S8 smartphone, show it is continuing to benefit from higher prices for the memory chips that go into mobile devices and computers.

"Rivals have failed to capitalise on the Note7 debacle while Samsung has been raking in profits from semiconductors and displays," Eugene Investment and Securities analyst Lee Seung Woo said before the results. "The favourable market in semiconductors will probably continue for some time."

Samsung will not provide net income or break out divisional performance until it releases final results later this month. It probably earned 7.5 trillion won in chips, 3.8 trillion won in mobile devices and 1.5 trillion won in displays, Mr Lee said.

Samsung last posted its best operating profit in the third quarter of 2013 when it earned 10.2 trillion won. Its shares have climbed 33 per cent this year, but closed 0.42 per cent lower yesterday in Seoul on profit-taking led by foreign investors.

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A version of this article appeared in the print edition of The Straits Times on July 08, 2017, with the headline 'Samsung's quarterly profit tops estimates'. Print Edition | Subscribe