Samsung Electronics' operating profit posts highest in history

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Samsung is still snagging record profits despite slowdown in smartphone sales. Sarah Tew CNET

The company said that it expects its operating profit in the three months will stand at 17.5 trillion won (US$15.50 billion), up 20.4 percent from 14.5 trillion won posted during the same period previous year. The previous high was 15.64 trillion won (13.8 billion US dollars) tallied in the first quarter of this year.

The earnings forecast from the South Korean electronics giant beat market consensus of about 17.1 trillion won according to market researcher FnGuide, with analysts expecting a jump in profits on a strong performance by the company's semiconductor unit.

The company did not provide detailed performance data for each division.

It was the biggest-ever quarterly profit in the company's history, surpassing the market expectations of around 17.2 trillion won (15.3 billion USA dollars). The projected sales are KRW 64-66 trillion, which equates to around $57.5 billion.

This is a much more positive return for the business compared to the second quarter of 2018.

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As indicated by Bloomberg and Reuters, however, the chip division is as yet its greatest business, on account of solid interest from data centers for distributed computing.

The company's dependency on its semiconductor's business is becoming an increasingly large concern.

The results could alleviate pessimism over demand for memory chips, even though there's remaining doubt whether customers will continue their buying next year.

At the end of July, Samsung Electronics announced a 0.1% decline in its net profit in the second quarter, due to a slowdown in the growth of the world market of high-end smartphones, which translated into a lower demand for its Galaxy S9. However, falling prices for some electronic components could stunt further earnings growth. The yield of the units is associated with higher prices for DRAM chips.

Price for memory chip, Samsung's best-selling product, was forecast to fall in the fourth quarter, while uncertainties lingered over the overall export amid the trade conflict among major economies.

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