South Korean tech giant, Samsung Electronics, has recorded a record-high revenue in the third quarter of 2021, the company announced today, Friday, October 8, 2021 in its earnings guidance for the third quarter.
Samsung’s preliminary revenues reached a fresh quarterly high of 73 trillion Korean Won (KRW), approximately 61.2 billion U.S. dollars, in the July-September quarter, up 9 percent from a year earlier.
The preliminary revenues surpassed the previous high of about KRW67 trillion (56.1 billion U.S. dollars) recorded in the third quarter of last year.
Operating profits
According to Samsung, its operating profit surged 27.9 percent year-on-year to KRW15.8 trillion (13.2 billion U.S. dollars) in the third quarter. However, the operating profit slightly missed market expectations of around KRW16 trillion (13.4 billion U.S. dollars), but it marked the second-highest quarterly reading in the company’s history.
Net income and detailed earnings on each business unit will be announced later this month after an external audit and the Board of Directors’ approval, the company said.
Samsung said “the above estimates are based on K-IFRS. Please note that Korean disclosure regulations do not allow earnings estimates to be offered as a range. To comply with such regulations, the above figures represent the median of the estimate ranges provided below”.
The recent figures as stated above, are preliminary but the company expects its third quarter sales to fall within the range of 72-74 trillion Korean Won with an Operating Profit between 15.7-15.9 trillion Korean won.
Earlier, the company forecast favourable market conditions for the component business in Q3 and highlighted that it will focus on enhancing product and technology leadership. In smartphones and consumer electronics, the Company said it aims to maintain solid profitability by strengthening the premium category leadership. From the preliminary revenues, it may in infer that the company may have achieved most of its targets for the third quarter.
Second quarter revenues
In the second quarter, Samsung Electronics, the world leader in advanced memory technology, recorded a Total consolidated revenue of KRW 63.67 trillion, a 20% increase from the previous year and a record for the second quarter.
According Samsung, its operating profit increased by 34% from the previous quarter to KRW 12.57 trillion in Q2 as market conditions improved in the memory market. The company stated that it was able to maintain a solid profitability for the finished product businesses due to effective global supply chain management (SCM).
In the second quarter, the Semiconductor business saw a significant improvement in earnings. Samsung explained that the strong performance of its Semiconductor business in Q2 was because its memory shipments exceeded previous guidance and price increases that were also higher than expected. The Company also noted that it strengthened its cost competitiveness.
The Company’s capital expenditures
The Company’s capital expenditures in the second quarter reached KRW 13.6 trillion, including KRW 12.5 trillion spent on semiconductors and KRW 0.6 trillion on displays. Total capital expenditures in the first half were KRW 23.3 trillion, including KRW 20.9 trillion for semiconductors and KRW 1.4 trillion for displays.
Investment in the Memory Business was spent mainly on addressing future demand through capacity expansion and process migrations to advanced nodes. Investment in the Foundry Business focused on expansion for advanced processes such as 5-nm EUV lithography.
READ ALSO: Chiwetalu Agu arrested for ‘inciting public; soliciting support for IPOB’— Nigerian Army