The preliminary result’s 33 % greater than within the first quarter and underscores rising demand for chips that has depleted shares amid shopper urge for food for electronics and pandemic-led knowledge heart funding payback. .
The world’s largest smartphone and reminiscence chip maker mentioned earnings for the quarter ending June 30 had been doubtless Rs 12.5 trillion (roughly Rs 82,025 crore), effectively above a Refinitiv SmartEstimate of 11.3 trillion SKW (roughly Rs 74,145 million). If confirmed later this month, it might be the tech big’s greatest second-quarter revenue since 2018.
“Third-quarter earnings are anticipated to be even greater because of robust costs for cellular DRAM reminiscence chips and peak seasons for show and cellular gadget corporations,” mentioned Park Sung-soon, analyst at Cape Funding & Securities. .
For the second quarter, Samsung’s chip division’s earnings had been doubtless up a fifth or extra from a yr earlier, analysts mentioned, helped by robust costs for reminiscence chips and demand for shopper electronics and electronics. knowledge heart prospects.
Samsung’s reminiscence chip shipments, particularly for DRAM chips broadly utilized in servers, cellphones, and different computing units, had been bigger than anticipated, contributing to chip earnings that overshadowed a pointy quarter-over-quarter decline within the smartphone shipments.
Improved efficiency in producing state-of-the-art 1z-nanometer DRAM chips utilizing ASML’s excessive ultraviolet (EUV) lithography machines additionally doubtless lowered prices from the primary quarter, analysts mentioned.
Income in Samsung’s contract chip manufacturing and logic chip design companies are additionally prone to have improved as operations at a storm-hit manufacturing unit in Texas returned to regular, analysts mentioned.
“One of the anticipated gadgets within the earnings name later this month is how a lot the chip contract manufacturing enterprise has progressed in competitiveness and the present standing of foundry prospects and orders,” mentioned Lee Received-sik, Korea Funding & Valores analyst.
“One other is the modifications that Samsung expects within the profitability of reminiscence chips, as rivals like Micron are mentioned to be closing the know-how hole (with Samsung),” Lee added.
Final month, US reminiscence chip rival Micron reported a quarterly revenue that beat Wall Road estimates and forecast present quarter income above expectations.
Samsung’s smartphone shipments fell to roughly 59 million in April-June from roughly 76 million within the first quarter, in accordance with Shinyoung Funding & Securities, as gross sales of its flagship mannequin launched within the first quarter slowed.
New COVID-19 outbreaks in areas equivalent to India and Vietnam, in addition to restricted provide of cellular processor chips, additionally affected smartphone shipments within the quarter, analysts mentioned. These circumstances are doubtless to enhance within the second half, they added.
A one-time revenue for Samsung’s show unit, which analysts mentioned was compensation from Apple for beforehand ordering fewer elements than agreed, was additionally included within the quarterly revenue.
Income elevated by roughly 19 % over the identical interval final yr to SKW 63 trillion (roughly Rs 4.13,630 crore), Samsung mentioned.
Shares of Samsung fell 1 % in morning buying and selling, whereas the broader market fell 0.7 %. Samsung shares have traded virtually unchanged to date this yr towards a 15 % enhance within the benchmark KOSPI index.
Samsung launched solely restricted knowledge in Wednesday’s regulatory submitting earlier than releasing detailed earnings figures later this month.
© Thomson Reuters 2021