South Korean giant Samsung Electronics’ operating revenue has tumbled by 56 percent in the third quarter of this year. The main reason behind the drop is the memory chip business of the company which is currently suffering from low demand.
However, on the positive note, the demand for memory chips has shown sign of improvements in the current quarter. We’ll get the clear picture when the company publishes the report after the end of the fourth quarter.
The company has reported that its operating profit has reached 7.7 trillion won (approximately $6.4 billion) in the July-to-September period, down 56.2 percent from a year ago in its preliminary earnings guidance. Its revenue dropped 5.3 percent to 62 trillion won during the same period. However, the full numbers will be released later this month.
Samsung’s quarter-on-quarter operating profit rose by 16.7 percent while the company’s revenue increased by 10.5 percent, thanks to the rising demand for Samsung’s smartphones in the global market. This is mainly being attributed to the ban on Chinese giant Huawei in the United States.
As per the analysts, the earnings of the South Korean giant will improve in the fourth quarter as well as the next year, mainly because of the recovery in DRAM and NAND memory chips. Shares of Samsung Electronics were trading at 48,400 won during morning trading, up by 1.36 percent, mainly because of better-than-expected earnings.
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While the company has witnessed low demand for the memory chip business, its smartphone business may offset the losses, thanks to the strong demand of the Galaxy Note 10 lineup as well as the revamped low-range and mid-range smartphones with the new Galaxy A-series and Galaxy M-series.
Since Huawei has been put on “Entity List” by the United States, effectively banning the company, Samsung, which is the leading smartphone brand globally, has been widening the gap with Huawei Technologies, the second leading smartphone brand, especially in the emerging markets.
Coming to the mobile shipments, Samsung’s smartphone shipments in the central and eastern Europe soared 21 percent in the second quarter compared to a year ago, solidifying its leadership in the region, reports Counterpoint Technology Market Research.
