Samsung Electronics saw its net profit for the third quarter halve, to KRW 6.29 trillion from KRW 13.15 trillion a year ago, hurt by the slump in memory chip prices and lower TV sales. Revenues fell 5.3 percent to KRW 62.0 trillion, as the decline in chips and consumer electronics offset growth in smartphones and mobile displays.
The mobile business continued to perform well, supported by the launch of the Note 10 and the popular A series mid-range smartphones. Samsung said the Note 10 performed better than its predecessor, with a double-digit volume increase. Revenues at the mobile & IT division rose 17 percent to KRW 29.25 trillion, and operating profit increased to KRW 2.92 trillion from KRW 2.22 trillion a year earlier. Samsung said the networks business also contributed to the growth, thanks to the expansion of 5G networks in Korea.
Samsung said it expects profits to fall sequentially in Q4 at the mobile business, as the launch effect wears off for new models like the Note 10 and marketing costs increase for the year-end sales. More models in the A series are planned, as well as expansion of the 5G networks business.
Mobile displays demand
Samsung also reported positive results from its display business, driven by demand from external customers for small mobile displays and Oleds. Revenues were still down 8 percent year-on-year but rose 22 percent from Q2 to KRW 9.26 trillion, and the operating profit improved to KRW 1.17 trillion from KRW 1.10 trillion a year ago.
While profits are expected to dip in Q4 on lower production utilisation, Samsung sees the mobile display business growing in 2020 from demand for 5G devices and its expansion in foldable displays.
Memory prices down, outlook cautious
At the semiconductor business, operating profit plunged to KRW 3.05 trillion from KRW 13.65 trillion a year ago as revenues fell 29 percent to KRW 17.59 trillion. While demand remained solid in most segments, the industry-wide slump in memory prices hit results. Despite promising segments such as data centres and 5G, Samsung was cautious on the chip business outlook for 2020 due to the macroeconomic uncertainties and said it will focus on enduring flexible production.
