Samsung says profits are rising, but smartphone competition is fierce
Samsung predicts its profits rose nearly 26% last quarter. That suggests demand for many of its products has kept up during the coronavirus pandemic even as it faces tough competition in the smartphone market.
The South Korean conglomerate said Friday that it expects to post operating profit of about 9 trillion Korean won ($8.2 billion) for the October-December quarter, an increase compared to the same period a year earlier but off somewhat from analyst estimates.
The company predicted sales of some 61 trillion Korean won ($56 billion), in line with the expectations of analysts polled by Refinitiv.
Samsung’s stock rose about 1.8% in Seoul on Friday.
The company did not elaborate on earnings, but it will report full results for the fourth quarter at the end of this month.
While demand for some of Samsung’s electronics and other components, such as display panels, will likely remain solid, the company faces tough competition in the smartphone market. Chinese rival Huawei briefly surpassed Samsung last year to become the world’s No. 1 smartphone seller, while Apple just launched a 5G-supported iPhone.
Even so, analysts expect earnings in 2021 to be strong as sales of smartphones and memory chips ramp up. Daiwa analyst SK Kim pointed to the forthcoming release of the Samsung Galaxy S21 as a bright spot.
“We see [Samsung] launching the Galaxy S series, its key flagship line, earlier than before by end-January 2021, which we believe will drive a sharp rebound in smartphone shipment,” Kim wrote in a research note earlier this week.
