Samsung foresees strong third quarter financial results, no traces of sluggish Q2

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Samsung is still snagging record profits despite slowdown in smartphone sales. Sarah Tew CNET

Samsung Electronics Co Ltd on Friday said its third-quarter operating profit likely rose to a record high, on demand from data centers and improved production yields.

Operating profit reached 17.5 trillion won (15.5 billion USA dollars) in the July-September quarter, up 20.4 percent from a year earlier.

Sales for the third quarter were 65 trillion won, matching the average projection compiled by Bloomberg. The previous record was 15.6 trillion won achieved in the first quarter of 2018. It earned 17.5 trillion won ($15.4 billion) in operating profit.

While the liquid-crystal display (LCD) business revenue is estimated to have dropped 28 percent, OLED business is estimated to have increased 35 percent year-on-year to over 7.5 trillion won.

But the operating income has been supported by a good performance of tvs top of the range - in particular because of the football world Cup - and memory chips.

Koh added that Samsung was close to concluding the development of a foldable smartphone and would be ready to unveil it this year.

The South Korean firm has seen earnings surge in recent years largely due to demand for memory chips in mobile devices, but falling prices for some electronic components could hit further earnings growth.

So much so that the company has released some projections for Q3 2018.

Samsung forecast revenues for the third quarter will climb to KRW64-66 trillion, up from the KRW62.05 trillion posted during the same period in 2017.

Samsung reported second-quarter operating profits fell almost 5% on quarter but increased 5.7% from the same period in 2017.

Samsung is also facing mounting competition from Apple and Chinese rivals and is looking for ways to boost momentum in a sluggish smartphone market.

Samsung did not speak about its performance and will not disclose its earnings until late in October. More specifically the strides that Samsung has been able to make in smaller architectures appears to be yielding dividends.

There have been predictions among market watchers that Samsung's earnings would slow down in the fourth quarter as DRAM and NAND flash prices are expected to decline.

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