Samsung Electronics on Thursday announced an earnings surprise for the third quarter of this year, posting the largest operating profit in two years.

The South Korean tech giant said in its preliminary earnings report that it would register 66 trillion won ($57.01 billion) in revenue and 12.3 trillion won in operating profit for the July to September period.

It was a surprise, since the financial market’s forecasts hovered around 10 trillion won.

If confirmed, the Q3 revenue will have soared 58.1 percent from the same period last year, with the operating profit gaining 6.45 percent during the same period.

The operating profit would be at its highest since the third quarter of 2018, when Samsung achieved 17.5 trillion won.

The revenue figure would be the largest since the fourth quarter of 2017.

Although the company didn’t provide a breakdown for the figures, it is widely believed that the chip business gained a boost from the US restrictions on Huawei, one of Samsung’s major customers. Reportedly, Huawei aggressively procured memory chips from Samsung in the third quarter before the US sanctions took effect.

“Samsung has posted bit growth of 4 percent for DRAM and 13 percent for NAND flash due to Huawei’s orders in August,” said Song Myung-sub, an analyst at Hi Investment & Securities.

The semiconductor business’s Q3 operating profit is estimated to be around 5 trillion won.

The mobile device business is also expected to report an improved performance, including high sales of the latest Galaxy Note 20 series and premium foldable devices.

Samsung’s smartphone shipments are projected to have jumped over 40 percent in the third quarter, reaching 80 million units, according to market analysts.

The mobile unit is expected to post over 4 trillion won in Q3 operating profit, which would be an increase of about 120 percent from the previous quarter.
The consumer electronics business is predicted to announce its largest profit since the second quarter of 2016 due to the pandemic and consequent trends toward social distancing and staying at home.

As more people globally sought to replace their old home appliances with new ones in recent months, the result of spending more time at home, Samsung saw expanded sales of home electronics both at home and abroad.

The consumer electronics unit is likely to post over 1 trillion won in operating profit in the third quarter, according to market forecasts.

By Song Su-hyun (song@heraldcorp.com)