- Samsung said its third-quarter profit likely jumped 58% to the highest in two years, beating analysts’ estimates.
- Its operating profit was likely 12.3 trillion South Korean won ($10.6 billion) for the three months ended September, it said.
- Samsung gained from US sanctions against Huawei and dampened demand for Huawei phones outside of China, analysts said.
- Shares in Samsung have gained about 7% so far in 2020.
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Samsung said Thursday that its third-quarter profit likely jumped 58% to more than $10 billion, the highest in two years, as US restrictions on China’s Huawei boosted the South Korean tech giant’s phone and chip sales.
US sanctions against Huawei have dampened demand for its phones outside of China, giving Samsung a leg up, analysts said.
The Chinese firm also hurried to order more chips from Samsung after Washington said it would choke its access to chips from mid-September.
Samsung said its operating profit was likely 12.3 trillion South Korean won ($10.6 billion) for the three months ended September, well above a Refinitiv SmartEstimate of 10.5 trillion won. It would be the strongest result since 17.57 trillion won, in the third quarter of 2018.
Revenue likely rose 6% from the same period a year earlier to 66 trillion won ($57.2 billion), the company said.
Samsung released only limited data in Thursday’s regulatory filing, ahead of the release of detailed earnings figures later this month.
“It seems Huawei’s impact on Samsung’s chip business was bigger than the market expected, and there was a big surprise in the smartphone and home appliance businesses,” said CW Chung, head of research at Nomura in Korea.
“Many consumers were reluctant to buy Huawei phones because they thought that Huawei may discontinue phone sales and services because of US restrictions,” Tom Kang, an analyst at Counterpoint said, adding that Samsung has boosted sales of mid- and low-end phones.
Samsung’s home appliance business also got a lift from the pandemic lockdowns, which spurred consumers to spend more on appliances such as air purifiers.
Samsung’s shares have gained about 7% so far this year.
They ended down 0.3% on Thursday in a slightly firmer overall market, with analysts pointing to memory chip prices and the uncertain Q4 outlook for the muted response.
Analysts doubted whether Samsung’s fourth-quarter profit could beat the third, as memory chip prices are seen bottoming out and a new Apple iPhone model is expected on the market.