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Enlarge ImageJuan Garzón/CNET
Samsung on Tuesday said its operating profit in the third quarter should nearly double from the previous year as comparisons get easier.
Still, the level is nowhere near Samsung’s performance two years ago when its Galaxy phones were in high demand. In the third quarter of 2013, Samsung’s operating profit set a quarterly record of 10.2 trillion won ($9.6 billion). After that period, the company’s results started sliding.
The South Korean electronics giant expects to report an operating profit of about 7.2 trillion Korean won to 7.4 trillion won, or about $6.29 billion. A year ago, its operating profit totaled 4.06 trillion won ($3.9 billion) — a steep 60 percent drop from 2013 as its mobile business struggled to compete with Apple on the high end and vendors like China’s Xiaomi on the low end. Analysts polled by Thomson Reuters most recently expected Samsung to report an operating profit of 6.74 trillion won in the third quarter of 2015.
Samsung also said its sales should total about 50 trillion Korean won to 52 trillion won ($43.9 billion) compared with the 50.5 trillion won projected by Wall Street.
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The company on Tuesday didn’t provide any commentary on its quarterly results. It will release its full earnings report in the coming weeks.
Samsung likely benefited from strong demand in its components business, which supplies parts for Apple and other tech companies. It builds some of the processors in Apple’s new iPhone 6S, which hit the market last month and sold in record numbers the first weekend it was available.
The rise in Samsung’s profits this quarter marks a change for the company — but it doesn’t necessarily mean things have turned around for good. Through the second quarter, Samsung had reported seven straight quarters of profit declines. It also warned during its last earnings release in July that it would cut the price of its three-month-old devices to attract new buyers. The third quarter last year was one of Samsung’s toughest quarters.
Samsung remains the smartphone king, but it has been hit hard by saturation in the high-end market and intensifying pressure on the low end. Samsung long counted on its marketing and hardware prowess to attract customers seeking an alternative to Apple’s iPhone. But the company has been facing new competition from low-cost phone vendors such as Xiaomi and India’s Micromax, which offer cheap devices with high-end specs in their local markets. Apple also became a bigger threat with last year’s larger screen iPhone 6 and 6 Plus.
In the second quarter, Samsung reported its operating profit declined only 4 percent, a much lower percentage than in previous periods.
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