Samsung Eyes Record Operating. Samsung Electronics has estimated a record operating profit of about Won10.1tn ($9.4bn) in the third quarter, slightly exceeding market expectations and helping to address investor worries that have weighed on its share price in recent months. In guidance issued ahead of a full earnings announcement later this month, the world’s biggest electronics group by sales estimated operating profit in the three months to September at between Won9.9tn and Won10.3tn, representing a quarter-on-quarter rise of about 6 per cent, and an annual increase of about 24 per cent. A poll of analysts by Thomson Reuters had yielded a consensus forecast of Won9.96tn. The South Korean group’s share price slipped by more than 10 per cent during the summer, as investors worried about fierce competition and squeezed margins in the smartphone industry, which accounts for most of Samsung’s profits. The earnings for the second quarter – in spite of rising 47 per cent year-on-year – undershot analyst forecasts, soon after JPMorgan and Morgan Stanley cut their forecasts for sales of the flagship Galaxy S4 phone. However, Samsung has recovered some of those losses over the past few weeks amid signs of a sustained recovery in the semiconductor business, which used to be the group’s main earnings driver but has been suffering from a glut of supply in the sector for much of the past few years. Mergers and elimination of smaller competitors have resulted in a memory chip sector with high barriers to entry, and in which the main producers are holding back from significant capacity expansion, bolstering prices
Posted on: Fri, 04 Oct 2013 06:45:05 +0000