Samsung Profit Beats Expectations but Chip Business Sags

By Kwanwoo Jun

Samsung Electronics reported better-than-expected net profit for the third quarter, but its core semiconductor business earnings shrank sharply from the previous quarter.

The mixed results come as the South Korean technology giant faces the twin challenge of catching up with industry rivals in supplying more advanced artificial-intelligence chips and mitigating the impact of lower-end chips from China flooding the markets.

Net profit for the July-September period was 10.101 trillion won, equivalent to $7.32 billion, up 73% from a year earlier, the company said Thursday. Profit rose 2.6% from the previous quarter.

That beat a FactSet-compiled consensus estimate of 8.601 trillion won.

Revenue for the quarter increased 17% to 79.099 trillion won and operating profit rose nearly fourfold to 9.183 trillion won, largely in line with the company's preliminary estimates.

The company on Thursday said its flagship chip-making division generated an operating profit of 3.860 trillion won, down 40% from the prior quarter. That compared with smaller home-country rival SK Hynix's 7.030 trillion won profit for the period.

Samsung earlier this month issued a rare apology to investors while guiding for downbeat quarterly earnings and acknowledging delays in supplying the latest version of its high-bandwidth-memory products to AI-chip maker Nvidia and other major customers.

The company's stock has dropped about 25% this year, while shares in rival makers of HBM--SK Hynix of South Korea and Micron Technology of the U.S.--have gained more than 30% and 20%, respectively. Taiwan Semiconductor Manufacturing's shares have jumped more than 70% this year.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

October 30, 2024 20:31 ET (00:31 GMT)

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