SEOUL: Samsung Electronics Co Ltd’s third-quarter revenue possible jumped 58% to its highest in two years, beating analyst estimates as U.S. restrictions on China’s Huawei boosted the South Korean tech big’s telephone and chip gross sales.
U.S. motion in opposition to Huawei Technologies Co Ltd has dampened demand for its telephones exterior of China, giving a leg as much as Samsung, analysts mentioned, whereas the Chinese agency additionally hurried to order extra chips from Samsung after Washington moved to choke its entry to commercially out there chips from mid-September.
Samsung mentioned on Thursday working revenue was possible 12.three trillion gained ($10.6 billion) for the three months ended September, effectively above a Refinitiv SmartEstimate of 10.5 trillion gained. It could be the strongest end result since 17.57 trillion gained within the third quarter of 2018.
Revenue possible rose 6% from the identical interval a yr earlier to 66 trillion gained, the corporate mentioned.
Samsung launched solely restricted information in Thursday’s regulatory submitting forward of the discharge of detailed earnings figures later this month.
“It seems Huawei’s impact on Samsung’s chip business was bigger than the market expected, and there was a big surprise in the smartphone and home appliance businesses,” mentioned CW Chung, head of analysis at Nomura in Korea.
MOBILE PROFIT BOOST
Samsung was anticipated to put up its largest smartphone revenue in a minimum of 4 years, analysts mentioned, because it gained market share from Chinese rivals and the coronavirus pandemic helped minimize advertising and marketing prices.
Washington, which says Huawei is a car for Chinese state espionage, has tightened restrictions on the agency, hurting demand for Huawei telephones in Europe and different nations and boosting Samsung’s gross sales at a time when markets exterior China are recovering from COVID-19 lockdowns, analysts mentioned.
“Many consumers were reluctant to buy Huawei phones because they thought that Huawei may discontinue phone sales and services because of U.S. restrictions,” Tom Kang, an analyst at Counterpoint mentioned, including that Samsung has boosted gross sales of mid- and low-end telephones.
A surge in anti-China sentiment in India following a border conflict in June can also be seen as offering a lift to Samsung, which competes with Xiaomi and different Chinese rivals there.
Samsung’s residence equipment enterprise additionally acquired a elevate from the pandemic lockdowns, which spurred customers to spend extra on home equipment akin to air purifiers.
CHIP PRICES BOTTOMING OUT
Samsung shares had been buying and selling up 0.2% in afternoon commerce in a barely firmer total market, with analysts pointing to reminiscence chip costs and the unsure This autumn outlook for the muted response.
Analysts doubted whether or not Samsung’s fourth-quarter revenue may beat the third, as reminiscence chip costs are seen bottoming out and a brand new Apple iPhone mannequin is predicted in the marketplace.
U.S. rival Micron Technology Inc, which posted a market-beating quarterly revenue final month, forecast lower-than-expected gross sales within the following quarter, because it had not but obtained new licenses wanted to promote its reminiscence chips to Huawei.
Market researcher Trendforce anticipated DRAM chip costs to say no by about 10% within the year-end quarter, as demand from the server trade has but to make a noticeable restoration.
This comes whilst Huawei rivals like Xiaomi, OPPO, and Vivo are all urgently stocking up on key elements, in flip offering some help for the cell DRAM chip market, Trendforce mentioned.
($1 = 1,157.3700 gained)