Samsung Electronics Expects Surge in Second-Quarter Operating Profit — Update
By Kwanwoo Jun
Samsung Electronics forecast a surge in second-quarter earnings, suggesting that its flagship semiconductor business sustained a strong recovery after a turnaround in the first quarter.
The South Korean technology giant said in a preliminary earnings report Friday that its quarterly operating profit is expected at 10.400 trillion won ($7.52 billion), a nearly 16-fold increase from KRW670.00 billion a year earlier.
The estimate beat a FactSet-compiled consensus forecast of KRW8.547 trillion.
Revenue is estimated to increase 23% to KRW74.000 trillion, Samsung said, above the FactSet consensus estimate.
The company didn't provide further details. It is set to release full quarterly results later this month.
The upbeat guidance suggests that the world's largest memory-chip maker continued its solid earnings recovery, aided by higher prices and brisk demand for powerful computing chips amid the artificial-intelligence boom.
The company's semiconductor business swung to a profit in the first quarter after four straight quarters of losses.
Citigroup analysts in a recent research note said they expect Samsung's chip segment to post a KRW5.1 trillion operating profit for the second quarter, up sharply from the prior quarter's KRW1.9 trillion profit.
Samsung is striving to regain its edge in the semiconductor business after lagging behind its rivals in advancing high-bandwidth-memory products, a crucial component for AI and other powerful computing devices that are leading a rebound in the chip industry.
Last month, AI chip giant Nvidia said it was still testing the Korean company's next-generation HBM3E products for potential use in its graphics processing units. Samsung's home country rival, SK Hynix, said in March that it had begun mass producing the advanced chips to supply Nvidia.
Samsung has bolstered its HBM research and development since it replaced its semiconductor business chief in May.
Shares were 1.7% higher early Friday, after having climbed 3.4% on Thursday before the preliminary earnings release.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
July 04, 2024 20:26 ET (00:26 GMT)
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