Samsung forecasts profit rise of 78 per cent to £4.13 billion

As per reports, since sales of chips and displays have become the strong and most likely offset weakness in its Smartphone division, recently Samsung Electronics announced that the company posts its first quarterly revenue expansion that was made in two years and was reported to beating expectations. Samsung also revealed that it expects its sales to reach around $43.5 billion. Samsung Electronics’ operating profits thus demonstrate a rebound that has continued since last year’s fourth quarter, indicative of a clear financial recovery.

Only a handful of securities firms expected Samsung would post an operating profit of 6.7 trillion won, and none suggested an estimate hovering above 7 trillion won, citing its sluggish smartphone performances.

Hwang Min-sung, an analyst at Samsung Securities Co., said shipments of smartphones apparently surged to 83 million units in the third quarter from 72 million units three months earlier.

Analysts said the company’s revival was helped by a weaker won and stronger sales in its chips business. Even though they are still the largest mobile phone manufacturer in the world, the Korean giant has been losing sales every quarter, signaling distress among the investors and resulting in a drop in market share and margins. This is a 79.8 percent increase from last year’s third quarter, and a 5.8 percent increase from the past second quarter. The top earner among the 22 companies analyzed listed a profit of 7.98 trillion, which Samsung Electronics surpassed by over 200 billion.

The won’s depreciation helped as well, with the average exchange rate against the dollar falling 12 percent in the third quarter from a year earlier, according to Bank of Korea data.

Samsung, however, is seeing the most success in its semiconductor division, as it is a supplier of chips not only for its own devices but for Apple as well. Samsung launched a pair of new smartphone models-the Galaxy Note 5 and the Galaxy S6 Edge +-in August, advancing the timing of its launch by several weeks to beat Apple Inc.in the market. This compares with an estimated operating profit of about 3.5 trillion won expected from the company’s chip unit. Samsung denied those reports but did confirm “relocations of workers” and a salary freeze. Samsung also has spent heavily on marketing in recent months to promote its new high-end phones.

“The time has come to reassess the value of the company’s component sectors”, said Lee Jae Yun, an analyst at Yuanta Securities Korea Co.