Samsung Elec says third-quarter profit likely jumped 58% after Huawei chip stockpiling, phone recovery

FAN Editor

October 8, 2020

By Joyce Lee and Hyunjoo Jin

SEOUL (Reuters) – Samsung Electronics Co Ltd <005930.KS> said on Thursday its third-quarter operating profit likely jumped 58%, beating analysts’ estimates, buoyed by a recovery in smartphone sales and a rush order of chips from Huawei Technologies Co Ltd [HWT.UL].

The South Korean tech giant said operating profit was likely 12.3 trillion won ($10.6 billion) in the quarter ended September, above the 10.5 trillion won analyst forecast by Refinitiv SmartEstimate.

Revenue likely rose 6% to 66 trillion won from a year earlier, the company said.

Samsung’s smartphone shipments during the quarter jumped to around 80 million units from 54.2 million in the second quarter after handset demand rebounded from a contraction due to the COVID-19 pandemic in the first half of 2020, analysts said.

While Samsung’s overall chip business was muted due to weaker memory chip prices during the quarter, analysts said orders for graphic chips for gaming consoles, and orders for mobile chips, including from Chinese smartphone maker Huawei Technologies Co Ltd [HWT.UL], boosted shipments.

Huawei is seen as having built stockpiles before U.S. restrictions from mid-September prevented it from buying chips made using U.S. technology without a license.

Shares of Samsung Electronics have risen about 7.3% so far this year versus the wider KOSPI market’s <.KS11> 8.6% rise.

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

(Reporting by Joyce Lee; editing by Richard Pullin)

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