[Asia Economy Reporter Changhwan Lee] Samsung Electronics' third-quarter earnings significantly exceeded market expectations, raising anticipation for the fourth-quarter performance. The industry expects Samsung Electronics' fourth-quarter results to decline compared to the third quarter due to seasonal factors. However, it is also possible that the results will again surpass expectations, as in the third quarter.
On the 11th, Hana Financial Investment announced that Samsung Electronics' preliminary third-quarter operating profit was 12.3 trillion KRW, greatly exceeding forecasts. The third-quarter performance was driven by the CE (Consumer Electronics) and IM (IT & Mobile) divisions, which belong to the set business sector.
In the IM division, smartphone shipments reached 80 million units, mainly mid-to-low-end models, improving profitability. The increased volume of mid-to-low-end product portfolios raised profit margins compared to before, and the expanded sales share through online channels also contributed to profitability improvement.
The strong smartphone shipments positively impacted not only the IM division but also the semiconductor and display divisions. In the display division, although the delay in new product launches by North American mobile customers postponed the recovery of OLED (Organic Light Emitting Diode) production line utilization compared to previous years, the rise in panel prices in the LCD (Liquid Crystal Display) division and strong demand for TVs and IT products helped maintain solid performance.
What trend will the company's overall operating profit show in the fourth quarter? Hana Financial Investment had previously estimated Samsung Electronics' fourth-quarter operating profit at 9.5 trillion KRW.
However, considering that the profit-generating ability in the third quarter exceeded expectations, they stated that the fourth-quarter operating profit estimate should be revised upward to over 10 trillion KRW. By division, semiconductors are estimated at 5 trillion KRW, displays at 1.3 trillion KRW, CE at 1 trillion KRW, Harman at 200 billion KRW, and IM at 3.3 trillion KRW. Combined, the total is 10.8 trillion KRW. Although slightly below the third quarter, the profit again exceeds 10 trillion KRW.
Kim Kyung-min, Senior Research Fellow at Hana Financial Investment, explained, "Samsung Electronics' fourth-quarter operating profit traditionally decreases compared to the third quarter and rarely increases significantly," adding, "This is because the IM division's operating profit typically declines in the fourth quarter compared to the previous quarter." However, Kim added, "Samsung Electronics' profit-generating ability is improving, so the third-quarter operating profit is expected to improve compared to previous estimates."
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