Samsung likely to post 35% surge in third-quarter profit as smartphone sales recover

FILE PHOTO: The logo of Samsung Electronics is seen at its office building in Seoul. Picture taken January 7, 2019. REUTERS/Kim Hong-Ji/File Photo

(Reuters) – Samsung Electronics Co Ltd’s 005930.KS September-quarter profit likely surged more than a third, fuelled by strong smartphone sales and a rush order of memory chips from Huawei Technologies Co Ltd, analysts said.

Samsung, the world’s biggest memory chip supplier, is scheduled to announce preliminary July-September operating profit and revenue on Thursday.

Profit likely rose 35% to 10.5 trillion won ($9.07 billion) from the same period a year earlier, according to Refinitiv SmartEstimate, derived from analyst estimates weighted toward those more consistently accurate. Revenue likely rose 3%.

While Samsung’s overall chip business was muted, analysts said orders from Chinese smartphone maker Huawei likely propped up sales. Huawei is likely to have built stockpiles before U.S. sanctions from mid-September prevented it from buying chips made using U.S. technology without a license, analysts said.

Last year Samsung’s chip business accounted for roughly half of its profit.

U.S. rival Micron Technology Inc MU.O posted market-beating profit last month, likely helped by Huawei’s rush to secure inventory, analysts said.

“Huawei’s emergency orders from late August drove up Samsung’s DRAM and NAND chip shipments, offsetting the effect of weak prices and limiting the drop in semiconductor profits for the quarter,” said analyst Song Myung-sup at HI Investment & Securities.