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Samsung predicts a decline in profits after an impressive third-quarter

Samsung released its report to investors related to earnings of the third quarter of 2020. According to the report, Samsung posted a huge profit in the third quarter this year due to increasing mobile and pc demands. This was mostly due to the shift towards a stay-at-home economy as Samsung calls it.

Due to rising smartphone competition as well as low demand for server chips, the profits of Samsung are likely to dwindle in the current quarter. The total demand for Samsung products has also increased by almost 8% year-over-year(YoY) with a quarter over quarter increase of 26%.

Profits are also expected to decline because of weaker quarter to quarter sales due to waning new model effects for flagships and growing marketing expenses in peak season. Profits will increase in 2021 due to a wider demand for 5G chips and newer and innovative products being launched in the premium TV market.

Samsung’s operating profit jumped from 8.15 trillion KRW in the second quarter to 12.35 trillion KRW in the third quarter which is a staggering increase of around 57%. This is Samsung’s highest quarterly profit since 2014.

This could be in part due to the restrictions imposed on Huawei driving Samsung’s sales skyward in the Chinese market.

Image Source: Fortune

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