Samsung Electronics Reports 53% Second Quarter Profit Increase, Beating Estimates

SEOUL, July 7 (Reuters) – Samsung Electronics Co Ltd (005930.KS) on Wednesday reported that its second-quarter operating profit had likely jumped 53%, beating analyst estimates as high chip prices and the demand increased profits.

The world’s largest memory chip and smartphone maker said profit for the quarter ended June 30 was likely 12.5 trillion won ($ 11 billion), above a Refinitiv SmartEstimate of 11.3 billion won ($ 10 billion) drawn from 20 analysts.

Revenue rose about 19% from the same period a year earlier to 63 trillion won, Samsung said in a brief preliminary earnings release.

Samsung’s chip division profits are likely to have jumped a fifth or more from a year earlier, analysts said, helped by high memory chip prices and consumer electronics and consumer demand for retailers. data centers.

Prices for DRAM chips, widely used in servers, mobile phones and other computing devices, jumped 27% from the March quarter, while those for NAND flash chips that serve the data storage market rose by 8.6%, according to search provider Trendforce.

Samsung’s memory chip shipments were also larger than expected, contributing to chip profits that eclipsed a quarter-over-quarter decline in smartphone shipments, analysts said.

Profits from its contract chip manufacturing and logic chip design operations also likely improved as operations at a storm-hit factory in Texas returned to normal, analysts said.

Last month, US memory chip competitor Micron Technology Inc (MU.O) reported quarterly profit above Wall Street estimates and forecast current quarter revenue above expectations. Read more

Samsung’s smartphone shipments fell to around 59 million in April-June, from around 76 million in the first quarter, according to Shinyoung Investment & Securities, as sales of its flagship model launched in the first quarter slowed.

New outbreaks of COVID-19 in regions such as India and Vietnam, along with a limited supply of mobile processor chips, have also hurt smartphone shipments, analysts said.

Samsung shares have traded almost flat so far this year, compared to a 15% increase in the broad market (.KS11).

Samsung released only limited data in Wednesday’s regulatory filing ahead of the release of detailed earnings figures later this month.

($ 1 = 1,136,7,800 won)

Reporting by Joyce Lee and Heekyong Yang; edited by Richard Pullin

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