SEOUL – Samsung Electronics Co. expects a 25% increase in operating profit in the fourth quarter, reflecting continued demand for its technical components amid coronavirus pandemic.
On Friday, the world’s largest smartphone and memory maker won South Korea’s operating profit of about 9 trillion won, equivalent to about $ 8.2 billion, in the last three months of 2020. that compares with 7.16 trillion won from the fourth quarter of the previous year. Samsung also expects to win about 61 trillion in revenue, compared to 59.88 trillion won a year ago.
Samsung’s estimates fell slightly lower than analysts ’estimate, compiled by S&P Global Market Intelligence, of about 9.35 trillion earned in operating profit and 61.07 trillion won in revenue.
South Korea-based company Suwon will report full earnings later this month. Samsung is considered a bellwether for the tech world, as it both manufactures its own major electronic products and supplies competitors, including Apple Inc. and Huawei Technologies Co., with components.
Samsung has outperformed many large companies during the pandemic, with its stock price rising 40% since the beginning of 2020. Sales of memory chips for data centers and consumer electronics rose early with double digits , helping to strengthen the company’s cash cow which represents the majority of its total operating profit. But other key sectors – notably its smartphone industry – have achieved sales.
The company is fishing for handicraft sales to recover sharply this year. Samsung is launching their flagship Galaxy S phones next week, pushing up the news within a month. Industry experts said they also expect a rise in memory prices, even as pandemic demand, a data center demands something, as buyers delayed last year’s stock buy back.
But Samsung’s pricing power could continue as economies reopen, as competitors compete to win back a business that fell through the pandemic, said Mehdi Hosseini, an analyst with Susquehanna International Group .
Samsung is expected to continue to grow its 5G network infrastructure business, which includes a $ 6.65 billion contract announced last summer with Verizon Communications Inc. in the US, a major market.
The company also has some city chiefs. Following the death of longtime Chairman Lee Kun-hee in October, his family over the next five years will have to pay an 11 trillion won estate tax – or about $ 10.1 billion. His son, Lee Jae-yong, vice-chairman of Samsung, could be sent back to prison in an appeals court decision expected later this month.
The case is linked to Mr Lee’s 2017 conviction for bribing South Korean Vice President Park Geun-hye. Prosecutors have demanded that Mr Lee be sentenced to up to nine years in prison.
Write to Elizabeth Koh at [email protected]