On October 29, Samsung Electronics released the company’s financial report for the third quarter ended September 30, 2020 on Thursday. According to the financial report, Samsung Electronics’ third-quarter net profit reached 9.36 trillion won (about 58 billion yuan), a year-on-year increase of 48.9%; operating profit was 12.35 trillion won, a year-on-year increase of 58.8%; revenue increased by 8% year-on-year, reaching 66.96 trillion won (about 526.936 billion yuan).
Although the spread of the Covid-19 pandemic has led to the closure and shutdown of stores and production sites in countries around the world, Samsung Electronics has responded to the challenges through its extensive global supply chain, while minimizing the pandemic by strengthening online sales channels and optimizing costs Impact. Samsung Electronics said in its preliminary financial report earlier this month that the company’s operating profit in the third quarter would reach 12.3 trillion won (about 73.971 billion yuan), an increase of 58% from 7.78 trillion won in the same period last year; revenue It will reach 66 trillion won, an increase of about 6.5% from 62 trillion won in the same period last year.
Samsung Electronics’ third-quarter operating profit hit 12.35 trillion won, up 58.8 percent year-on-year, thanks to strong sales of memory chips and consumer products, according to a financial report released by Samsung Electronics on Thursday. Growth and efficient cost management, up 52% sequentially.
Samsung Electronics’ third-quarter revenue reached 66.96 trillion won (about 526.936 billion yuan), an increase of 8% year-on-year.
By sector, Samsung Electronics’ semiconductor business posted solid earnings as higher-than-expected shipments from healthy demand for mobile and PC products outweighed the impact of lower memory chip prices. In the third quarter, Samsung Electronics’ semiconductor business revenue reached 18.8 trillion won and operating profit reached 5.54 trillion won. As for the outlook for next year, mobile demand is expected to grow steadily through the first half of the year as 5G continues to expand into low- and mid-range models, despite geopolitical issues and the possibility of longer-term impacts from the COVID-19 pandemic. . For servers, a reversal in demand in the first half of the year is highly likely as inventory levels normalize and customer investment recovers.
Samsung Electronics’ Display panel business recorded 7.32 trillion won in revenue and 0.47 trillion won in operating profit in the third quarter, driven by growth in smartphone, TV and display panel sales. Looking ahead to the fourth quarter, Samsung Electronics expects the launch of new smartphones to bring strong demand for mobile phone displays. It will actively respond to customer needs and strengthen its product portfolio to increase sales and profits. For large displays, the company will continue to meet existing LCD customer needs and accelerate the transition to the new QD display technology. The company also expects 5G services to drive a gradual recovery in the smartphone market, although uncertainty may continue in 2021 due to the COVID-19 pandemic, and will focus on strengthening its leadership in OLED panels.
The IT and Mobile Communications Division, which includes the mobile phone business, posted 30.49 trillion won in revenue and 4.45 trillion won in operating profit in the third quarter. Samsung Electronics said overall market demand increased in the third quarter as stimulus measures helped many economies recover in the second quarter. The company’s smartphone sales rose sharply from the previous quarter on the back of the launch of new flagship models such as the Galaxy Note20 and Galaxy Z Fold2, as well as strong sales of mass-market models in key regions, including India. In addition, higher sales of tablets and wearables including the Galaxy Tab S7, Galaxy Watch3 and Buds Live, as well as effective cost management through component standardization and reduced marketing expenses, also significantly improved profitability, driving the third quarter profit growth.
Samsung Electronics expects that the overall smartphone market demand will continue to recover in the fourth quarter due to strong year-end seasonality. However, smartphone sales are expected to decline QoQ due to the subsidy effect from the launch of new flagship models. In addition, increased marketing spending in response to increased competition and year-end seasonality could also weigh on profits. Looking ahead to 2021, mobile market demand is expected to grow year-on-year, supported by continued economic recovery and accelerated migration to 5G networks, despite the uncertainty of the COVID-19 pandemic. Samsung Electronics’ IT and mobile communications division will expand smartphone sales by strengthening its lineup of foldable phones and mass-market 5G models.
Samsung Electronics’ consumer appliance division reported 14.09 trillion won in revenue and 1.56 trillion won in operating profit in the third quarter. Uncertainty from the new crown pneumonia epidemic will continue in the fourth quarter, and rising costs during the year-end peak season remain a risk, Samsung Electronics said. The company plans to continue expanding online sales and special online and offline promotions to enhance high-end product lines such as QLED and lifestyle TVs. Looking ahead to 2021, the company expects the pandemic to further alter the TV market environment. It will continue to launch high-end models such as QLED and home micro-LED to lead the ultra-large-screen TV market segment.
Samsung Electronics’ capital expenditure in the third quarter was 8.4 trillion won, of which 6.6 trillion won was invested in the semiconductor business and 1.5 trillion won in the display business.
Overall, Samsung Electronics expects fourth-quarter profit to fall due to weaker demand for memory chips from server customers and increased competition from mobile phones and consumer electronics. For 2021, the company expects a recovery in overall global demand, but uncertainty remains about the likelihood of a resurgence of the COVID-19 outbreak.
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