Samsung Electronics tips Q3 operating profit to plunge 78% on semiconductor losses

Samsung Electronics Co. predicted Wednesday its operating profit for the third quarter is likely to drop 78 percent on year, as losses from its semiconductor business continued amid a global downturn of the chip industry.

The world's biggest maker of memory chips expected a third-quarter operating profit of 2.4 trillion won ($1.8 billion), down 77.9 percent from a year ago, Samsung Electronics said in a regulatory filing.

However, the expected operating profit was 30.5 percent higher than the average estimate, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency. The figure was nearly threefold bigger than that of the previous quarter.

Third-quarter sales are estimated to decline 12.7 percent to 67 trillion won, Samsung said, without providing its estimate for net income.

Samsung Electronics, also the world's biggest maker of smartphones, reported operating profits of 640.2 billion won and 668.5 billion won in the first and second quarters, respectively.

The company will release its final earnings report later.

Samsung did not release detailed performances of its key business divisions, but market watchers expect that its semiconductor unit, which oversees its cash cow chip business, incurred a loss of around 3 trillion won in the third quarter,

Analysts predicted that losses incurred in semiconductors were offset by strong performance by its mobile and display divisions, thanks to the launch of the company's new Galaxy Z Flip 5 and Fold 5 smartphone models. (Yonhap)