Samsung Electronics says second-quarter operating profit likely rose 72 percent year-on-year

Reuters News
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Posted: Jul 06, 2017 7:48 PM

By Joyce Lee

SEOUL (Reuters) - Samsung Electronics Co Ltd <005930.KS> on Friday said its second-quarter operating profit likely rose 72 percent from a year earlier to a new record, beating analyst estimates, as strong memory chip prices helped widen margins.

The Apple Inc <AAPL.O> smartphone rival and global memory chip leader said second-quarter operating profit was likely 14 trillion won ($12.11 billion), compared with the 13.1 trillion won average of 19 analyst estimates in a Thomson Reuters poll.

Revenue likely rose 18 percent from a year earlier to 60 trillion won, versus analysts' forecast of 59 trillion won.

Samsung shares are trading at a near-record high of 2.4 million won as of Thursday, as investors look forward to record earnings in 2017 driven by growing demand for chips capable of powering ever more complex servers and smartphones.

On Tuesday, the company said it would invest $18.6 billion to extend its lead in memory chips and next-generation displays.

Samsung did not elaborate on its April-June performance and will disclose detailed results at the end of July. Even so, analysts have tipped its chip division to propel the firm to record overall profit.

The memory chips industry is widely expected to ride a prolonged super-cycle for several years on the back of consolidation and new demand from services such as cloud computing and artificial intelligence (AI), Nomura said in a report this week.

Growing sales of organic light-emitting diode (OLED) smartphone screens also have supported forecasts of a new earnings record in the third quarter.

Samsung is preparing to unveil the Galaxy Note 8 handset in August, a source told Reuters. Sales prospects for the device will be closely watched after Samsung was forced to pull its predecessor from the market two months after launch last year due to fire-prone batteries.

($1 = 1,156.4200 won)

(Reporting by Joyce Lee; Editing by Stephen Coates)