Samsung Electronics predicts that profit will jump despite virus

Samsung Electronics forecasts an operating profit increase of 23% in the second quarter of Tuesday, and strong demand for memory chips and displays overcomes the impact of the coronavirus pandemic on smartphone sales.

The world’s largest smartphone and memory chip makers expect operating profit from April to June to be 8.1 trillion won ($6.8 billion) from 6.6 trillion won in the same period of the previous year, according to a profit estimate.

This forecast far exceeded the analyst’s forecast for single-digit decline.

Lockdowns around the world, especially in Europe and the United States, in the face of the coronavirus outbreak have boosted Samsung’s chip business, and data centers have been stockpiling DRAM chips to meet the exponential demand for online activity. It’s moving.

“The revenue surprises seem to come from Samsung’s memory chip sector,” said Park Jin-suk of Counterpoint, a market observer, “increasing demand for memory chips for PCs and a continuing rise in DRAM chip prices. I pointed out.

Similarly, TV sales, which have continued to decline over the long term, have “increased as people spend more time at home, increasing demand,” analysts at market monitor Euromonitor International Korea said. Said James Khan.

However, Samsung also predicts overall sales for the second quarter will be 7.3% lower than the same period last year.

According to Counterpoint, the company is the world’s largest smartphone maker, with 20% of the global market share in the first quarter, with China’s Huawei at 17% and Apple at 14%.

According to market tracker Gartner, global smartphone sales fell more than 20% year-on-year in the first quarter, with a pandemic hitting consumer spending and causing widespread economic uncertainty.

Samsung said the increase in estimated operating profit was due to one-off profits from the Display division without revealing details.

In the future, analysts expect the company’s smartphone and TV business to improve, and mobile sales are rising as deregulation in some parts of the world is lifted.

“Sales in the US and Europe have shown signs of improvement since the second half of the second quarter,” the smartphone said.

“We expect revenue to increase in the third quarter,” he added, adding that he expects smartphone sales to be “less than $70 million” from July to September.

The recent military struggle between India and China could also affect Samsung’s support, Kang said.

Samsung Electronics is very important to the health of South Korea’s economy.

It is the largest subsidiary of Samsung’s giant group, and by far the largest family-owned company known as the chaebol that controls business in the 12th largest economy in the world.

Its total sales amount equals one-fifth of the country’s gross domestic product.

Vice-Chairman and Defactoryder Ijeyon is currently being retried in a vast corruption scandal where he can see him return to prison.

He was not detained during the lawsuit, but a conviction could deprive the company’s chief decision maker.

Samsung will hold net income and performance data by sector until we release the final earnings report scheduled for later this month.

© 2020 AFP

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