October 31 (UPI) — Samsung Electronics Co. reported today that its third-quarter operating profit fell 56 percent from a year earlier, though up 18 percent from the second quarter, as chip prices fell as a result of a continuing industry recession.
Samsung said third-quarter operating profit was 7.8 trillion won ($6.7 billion), slightly higher than the 7.7 trillion won it had expected. In the same period last year, the company’s operating profit was 17.57 trillion won.
Consolidated sales in the third quarter were 6.2 trillion won, compared with 65.46 trillion won in the same period last year. Net profit for the third quarter was 6.1 trillion won ($5.2 billion), better than the average analyst estimate of 5.5 trillion won.
Samsung’s profits are expected to improve as the memory industry recovers from a prolonged slump. Samsung’s smartphone business has suffered a series of setbacks over the past few years, but is now benefiting from a U.S. government crackdown on Huawei, while demand for Samsung Electronics’ most advanced display is rising.
“We are seeing improvement in the chip industry,” analysts at brokerage IBK Securities said in an interview On the 22nd of this month. We expect demand for server chips to grow significantly, and the new folding-screen smartphone product will be a new growth factor. “
Samsung Electronics’ shares have risen more than 30 percent so far this year.
But analysts say Samsung Electronics’ profits have fallen for four consecutive quarters from a year earlier and are expected to fall again this quarter.
The memory components used in smartphones and data centers are Samsung Electronics’ main profitable business.
Earlier this month, Samsung’s domestic rival, SK Hynix, said the 5G-enabled smartphone would help the global memory market out of the doldrums next year.