With the Korean tech giant’s smartphone and chip businesses largely benefiting from tougher U.S. sanctions on the Chinese company Huawei, operating profit for the quarter likely came in at 12.3 trillion Korean won (about $10.6 billion)—substantially higher than the 7.78 trillion won posted a year ago.
The third-quarter estimate handily beat the market consensus of 10.5 trillion won, according to Yonhap Infomax, which surveyed nineteen Korean brokerage firms last month.
Consolidated sales were roughly sixty-six trillion won for the quarter, up nearly 7% from the year prior. The figure was also above the market consensus of sixty-four trillion won.
“Samsung did not have real major competitors in the smartphone market last quarter while marketing costs were sharply reduced by online sales during the pandemic,” Kim Young-woo, an analyst at SK Securities, told the Financial Times.
He estimated that the company shipped about seventy-eight million smartphones in the third quarter, compared to fifty million units in the previous quarter.
Mark Newman, the managing director and senior analyst at Bernstein, seemed to agree with that assessment.
“I think a large part of it seems to be smartphone units were up a lot,” he said during an interview on CNBC’s “Street Signs Asia” on Thursday. “We did have a chance to talk to the company briefly this morning and seems like the smartphone units have been very, very strong in Q3.”
Newman added that Samsung’s networking-equipment business is also performing well, as it has continued to steal market share from Huawei in 5G equipment sales. Last month, Samsung was able to win a $6.6 billion contract to supply Verizon with networking equipment.
“So, I think smartphones, telecom equipment, and a bit of semiconductor are the main reasons for the beat,” Newman said.
Outside the mobile division, Samsung’s consumer electronics and home appliance businesses—in high demand due to coronavirus-driven stay-at-home orders—also likely boosted the company’s strong overall numbers.
Samsung is expected to release its full results for the quarter later this month.
Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.