Samsung Electronics flags 53% jump in Q2 profit, topping estimates

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FILE PHOTO: The logo of Samsung Electronics is seen at its office building in Seoul, South Korea South Korea, October 11, 2017. REUTERS/Kim Hong-Ji/File Photo

July 7, 2021

By Joyce Lee and Heekyong Yang

SEOUL (Reuters) -Samsung Electronics Co Ltd said on Wednesday its second-quarter operating profit likely jumped 53%, beating analysts’ estimates, as strong chip prices and demand lifted earnings.

The world’s largest memory chip and smartphone maker said profit for the quarter ended June 30 was likely 12.5 trillion won ($11 billion), above a Refinitiv SmartEstimate of 11.3 trillion won ($10 billion) drawn from 20 analysts.

Revenue rose an estimated 19% from the same period a year earlier to 63 trillion won, Samsung said in a short preliminary earnings release.

Profits at Samsung’s chip division likely jumped by a fifth or more from a year earlier, analysts said, helped by strong memory-chip prices and demand for consumer electronics and from data centre customers.

Prices of DRAM chips, widely used in servers, mobile phones and other computing devices, jumped 27% compared with the March quarter, while those of NAND flash chips that serve the data storage market rose 8.6%, according to research provider Trendforce.

Samsung’s memory chip shipments were also larger than expected, contributing to chip profits that dwarfed a quarter-over-quarter decline in smartphone shipments, analysts said.

Profits at its chip contract manufacturing and logic chip design businesses were likely to have improved too as operations at a storm-hit factory in Texas returned to normal, analysts said.

Last month, U.S. memory chip rival Micron Technology Inc reported a quarterly profit that beat Wall Street estimates, and forecast current-quarter revenue above expectations.

Samsung’s smartphone shipments fell to about 59 million in April-June from about 76 million in the first quarter, according to Shinyoung Investment & Securities, as sales of its flagship model launched in the first quarter slowed.

New COVID-19 outbreaks in regions such as India and Vietnam, as well as constrained supply of mobile processor chips, also hurt smartphone shipments, analysts said.

Samsung shares have traded nearly flat so far this year versus a 15% rise in the wider market.

Samsung released only limited data in Wednesday’s regulatory filing ahead of the release of detailed earnings figures later this month.

($1 = 1,136.7800 won)

(Reporting by Joyce Lee & Heekyong Yang; editing by Richard Pullin)





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