Samsung beats market expectation with Q2 earnings 

Samsung Electronics posted 8.1 trillion won in operating profit and 52 trillion won in revenue in the second quarter, the company said in its earning guidance on Tuesday.

Operating profit rose 22.73% from a year prior and 25.58% from the previous quarter. Revenues dropped 7.36% year over year and 6.02% quarter over quarter.

The performance beats South Korean analysts’ market consensus of operating profits in the mid-6 trillion won range with revenues of 51 trillion won.

Demand for server memory chips, lowered marketing cost for end-products and a one-time cash injection to its display panel business is to have helped profitability.

Samsung’s operating margin rate was 15.6% for the second quarter, its highest since the fourth quarter of 2018 when the rate was 24.2%.

Samsung’s semiconductor business, called Device Solutions by the firm, is expected to have performed better than expected. Demand from smartphones dropped but those from servers and PCs is expected to have rose from remote work caused by the COVID-19 pandemic. 

Prices for DRAM and NAND flash rose in the second quarter from the previous quarter and the business is thought to have contributed over 5 trillion won in operating profits.

The company’s mobile and consumer electronics is thought to seen their profits fall compared to a year ago but better than initially feared by the market from lowered marketing costs.

Samsung Display is also thought to have received a payment of around 900 billion won from Apple for buying less OLED panels than the minimal requirement. The South Korean firm received a similar payout last year in the second quarter. The display unit was expected to suffer an operating loss between 500 billion won to 700 billion won due to lowered factory operation rate due to poor sales of iPhones but the payment would offset this and help the business turn a profit.

Samsung’s third quarter earnings remain uncertain however. South Korean analysts expect profits to improve in the quarter but the COVID-19 pandemic and possible price drops in memory chips remains possible contingencies for the company.