Samsung Electronics Co Ltd (SSNLF) recently estimated that its operating profit likely rose to a new record in the second quarter of its fiscal year. The company said second-quarter operating profit was likely 14 trillion won ($12.11 billion), up 72 percent from a year earlier. That is higher than the 13.1 trillion won average analyst estimate, according to a Thomson Reuters poll.
Revenue for the company was expected to have risen 18 percent from a year earlier to 60 trillion won. Analysts had expected revenue of 59 trillion won. Samsung will disclose detailed results at the end of July. The company’s stock is up more than 30 percent this year and hovering near all-time highs.
Samsung’s results shows it’s continuing to benefit from higher prices for the memory chips that go into mobiles and computers. A boom in semiconductor sales helped offset sluggish growth in the smartphone market and a slow recovery in the global economy. Samsung’s semiconductor revenue, which had been second to Intel’s, likely surpassed its rival’s in the second quarter.
Samsung’s memory chips are crucial for global tech companies in the era of explosive growth of data. The adoption of artificial intelligence and the arrival of the internet of things means that companies will need even more microchips from Samsung to handle the increased data with speed and energy efficiency. Polled analysts believe chip prices will keep rising and another record operating profit is likely for Samsung in the third quarter.
Another profit driver has been Samsung’s organic light-emitting diode (OLED) displays. The flexible, next-generation screens are widely expected to be used for Apple’s latest iPhones, which are expected to be out by October. The company announced plans to invest $18.6 billion to extend its lead in memory chips and next-generation displays.
Samsung is preparing to unveil its Galaxy Note 8 handset in August. The launch will be closely watched after its predecessor was pulled from the market last year due to fire-prone batteries. The company is counting on the Note 8 to repair its reputation and regain ground lost to rivals following the controversy over the Note 7.