The preliminary result was up 26 percent from the second
quarter, although just below forecasts, while the market reaction was further
muted as analysts pencilled in a flat or slightly lower result this quarter on
an expected fall in memory chip prices.
The world's largest memory chip and smartphone maker
estimated its July-September profit at KRW 15.8 trillion, below a Refinitiv
SmartEstimate of KRW 16.1 trillion. It is the highest quarterly profit since
the third quarter of 2018.
"The mobile business' operating margin might have been
lower than the market expected," said Park Sung-soon, analyst at Cape
Investment & Securities. "We will have to see marketing costs and what
the mix of products Samsung sold was like."
Rising memory chip prices and shipments, plus a jump in
profitability at Samsung's chip contract manufacturing business, likely raised
the chip division's operating profit by about 79 percent from a year earlier,
analysts said.
Semiconductors accounted for about half of Samsung's
operating profit in the first half of the year.
Samsung shares pared early gains to be up 0.4 percent in
afternoon trade. It is due to announce detailed earnings later this month.
The stock has fallen about 12 percent so far this year
versus a 3 percent rise in the wider market, hurt by losses in September when
US peer Micron said its memory chip shipments would slip in the near term.
Analysts said prices for memory chips are expected to tumble
this quarter as demand for personal computers drops amid an expected easing in
global lockdowns that have helped power sales, while smartphone shipments may
also decline.
A bright spot next year is expected to be Samsung's chip
contract manufacturing business, which on Thursday announced plans to start
producing cutting-edge, 3-nanometre chip designs in the first half of 2022, as
it races against industry leader Taiwan Semiconductor Manufacturing Co to
preempt advanced technology and win clients.
For Samsung's mobile business, estimated sales of 2 million
new foldable smartphones within a month showed demand for its foldable handsets
captured more of the mass market than last year, analysts said.
However, this was likely offset by marketing costs and
higher component costs due to the global chip shortage.
Samsung's display unit likely saw solid results as key
customer Apple ramped up orders before its late-September launch of the iPhone
13 series, analysts said.
Overall revenue likely rose about 9 percent from the same
period a year earlier to a record KRW 73 trillion, Samsung said in a filing. -Reuters