Manasi VarmaTech giant Samsung Electronics has on Thursday reported its 2nd-highest operating profit for Q3, while hitting record sales. Net profit went by 31.3 percent year-on-year, hitting values close to 12.29 trillion won ($10.5 billion) for the third quarter ended September. Operating profit, meanwhile, went up 28 percent in the quarter, sitting at 15.82 trillion won in what happens to be the largest profit for Q3 since 2018, and the second highest ever.
Image Credits: Samsung
Profit Up 26 Percent and Sales Up 10 Percent
Sales too, hit a quarterly record, going up 66.96 percent from last year’s 73.98 trillion won. The news was announced by the largest smartphone and memory chip vendor in the world through a regulatory filing, and was reported by South Korean news agency Yonhap. Seen quarterly, the operating profit was up 26 percent from the previous quarter, while sales went up 10 percent.
Meanwhile, the IT and Mobile Communications division raked in 28.42 trillion won as revenue, with operating profits standing at 3.3 trillion won. The firm’s display panel business heavily contributed to profits in the third quarter, standing at 1.49 trillion won.
Dip Expected in Q4?
The strong performance has mainly been attributed to the firm’s chip business, which has been seeing a rapid growth amid the rising prices of semiconductor chips. These have further been boosted by enhanced yield rates and higher profitability of the contract manufacturing business.
Meanwhile, its smartphone business has also noted a significant growth following the release of the Galazy Z Folder Folder Galaxy Z Flip3, two new foldable smartphone models.
While the company must be riding high on its strong figures for the third quarter, things do appear to be a bit darker for the fourth quarter as memory chip prices are expected to decline amid the decreasing demand for IT products as countries shift to lifting restrictions.
Industry tracker TrendForce has predicted DRAM (dynamic random access memory) prices to fall by 15 to 20 percent annually in Q4, while also entering a downward trend starting early next year. Samsung has admitted that its earnings improved significantly significantly to high DRAM demand and an improved foundry business. It also said in its statement that the setting of a new quarterly bit shipment record, along with the second-highest revenue through DRAM, was made possible by the major growth in server sales sales a favorable price situation.
Nevertheless, Samsung has said that it expects the demand for servers to remain robust in the fourth quarter, even in the face of the persisting component supply issue.