Samsung’s strong earnings hint at recovery from Covid-19 fallout
- Samsung posted operating profit of 8.1 trillion won (US$6.8 billion) in the second quarter, beating the 6.2 trillion won average of estimates
- The South Korean company’s strong performance suggests the tech industry is climbing back from the Covid-19 pandemic
The world’s largest manufacturer of memory chips and smartphones posted operating profit of 8.1 trillion won (US$6.8 billion) in the three months ended June, beating the 6.2 trillion won average of estimates. Sales for the quarter were 52 trillion won, according to preliminary results released Tuesday. The company did not provide net income or break out divisional performance, which it will do later this month when it releases final results.
Samsung shares were little changed in early trading in Seoul on Tuesday.
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“Because of this work-from-home situation, there’s been strong demand for a couple of its products,” said Kiranjeet Kaur, a research manager at IDC. “The demand for DRAM has seen a spike in Q2 due to demand in server and data centers.”
Samsung’s mobile and consumer electronics businesses took a hit from store and plant closings since mid-March, but they’ve begun reopening across North America and Europe from June. Hana Financial Investment forecasts Samsung will report around 5.5 million smartphone shipments for the second quarter when it releases its full earnings breakdown.
“Earnings remained brisk despite the weakness of offline-dependent smartphone sales,” Greg Roh, senior vice-president at HMC Securities, said ahead of the announcement. “Going forward, the market will have more confidence in Samsung’s ability to stave off the next macro crisis.”