Samsung forecasts Q4 profit jump

Samsung forecasts Q4 profit jump

Samsung Electronics issued bullish earnings guidance for the final quarter of 2021, with operating profit expected to be 52.5 per cent higher year-on-year driven by strong demand for memory chips and a rebound in smartphone sales.

The Korea-based consumer electronics giant estimated operating profit at KRW13.8 trillion ($11.5 billion), on revenue of about KRW76 trillion, up 23.5 per cent. The Wall Street Journal attributed the forecast to steady demand for memory chips and rising margins on Samsung’s silicon manufacturing business.

But analysts are reportedly concerned a lockdown in the Chinese city of Xi’an, where Samsung has a chip factory, could impact supplies in the short term and lead to higher prices.

Net profit and revenue by division will be revealed when it issues its full earnings report later this month.

In Q3, Samsung’s smartphone shipments fell 18.2 per cent due to continued supply constraints and weaker demand, while operating profit declined 24.5 per cent to KRW3.4 trillion, due in part to rising marketing costs.

Samsung announced a restructure in early December, planning to combine its mobile business with its broader consumer electronics unit and reshuffling leadership.