Samsung’s consolidated sales for the third quarter rose by about 6.5% from a year ago coming in at 66 trillion won (Q3 2019 consolidated sales were 62 trillion won).
Samsung Electronics Co Ltd (KRX: 005930) has revealed in its latest guidance that its Q3 earnings likely rose by 58% beating analyst’s expectations. Per a CNBC report, the Samsung Q3 earnings guidance revealed that the company’s operating profit for the quarter likely came in at 12.3 trillion Korean won (about $10.6 billion) as against the expected 10.5 trillion analysts predicted for the September quarter, according to Refinitiv SmartEstimate.
Samsung’s consolidated sales for the third quarter rose by about 6.5% from a year ago coming in at 66 trillion won (Q3 2019 consolidated sales were 62 trillion won). While Samsung did not give a detailed breakdown of its individual business units in the Q3 earnings guidance call, analysts believe the growth in earnings might have been driven by Samsung’s flagship smartphone models including the Galaxy Note 20, the new foldable 5G smartphones as well as the electronics units.
“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,” Mark Newman, managing director, and senior analyst at Bernstein.
The earnings guidance despite its positive detail was unable to cascade into Samsung’s shares which are currently trading at KRW59,700 (0.33% low) at the time of writing.
Samsung Q3 Earnings Fueled by Ongoing Huawei-U.S. Woes
As noted by Newman, the current ban on Huawei imposed by the United States limiting the sales of chips the firm uses in manufacturing its phones must have helped Samsung in ticking the record operating profits and sales for the quarter.
The ban has also given Samsung the edge in gaining the market share in the networking business from Huawei. As Coinspeaker.com reported, last month, the South Korean tech giant said it had won a $6.6 billion contract to supply Verizon with 5G network equipment. Newman also prospected that should the ban plunge Huawei’s operations such that it is unable to meet with its demands, Samsung may see a more upward plunge in sales as users will rather swarm the company’s devices rather than going for iPhone, a notion drawn from the fact that both firms make use of Google’s Android operating system.
Samsung has often reported impressive growths trailing the companies previously reported earnings in both the first and second quarters respectively. Despite the effects of the COVID-19 pandemic, Samsung had a year on year growth of 2.7% in its Q1 earnings report while the company’s Q2 profits amounting to about 8.1 trillion Korean won (around $6.8 billion) represents a 21% year on year growth.
With Samsung’s impressive growth trajectory and the company’s current market advantage fueled by Huawei’s business limitations, the company is agreeably poised for more wins in the near future.
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