Samsung, LG perform better in Q3 despite pandemic

Anticipations are high for South Korea’s electronics industry to announce earnings surprises for the third quarter, despite initial worries about the impact of COVID-19, according to industry sources Monday.

Due to higher sales of semiconductors, smartphones and home appliances over the last three months, Samsung Electronics and LG Electronics are forecast to report increased operating profits for the July-September period. According to the latest forecasts by financial market researcher FnGuide, Samsung is projected to post about 10.3 trillion won ($8.85 billion) in third-quarter operating profit.

It would be the first time in two years for Samsung to return above 10 trillion won in quarterly profit. Samsung posted 10.8 trillion won in the fourth quarter of 2018 during the semiconductor supercycle.

The semiconductor business has reportedly benefited from US restrictions on Huawei. In the third quarter, the Chinese company increased its chip purchases from Samsung before the sale ban is to take effect.

The smartphone unit is also expected to announce favorable results owing to high sales of Galaxy Note 20 series and premium foldable devices.

In August, Samsung topped the global smartphone market with a 22 percent share, according to a report by CounterPoint Research.

Expectations are high for Samsung’s consumer electronics division as well. US market researcher Statista announced Samsung accounted for 32 percent of the US smart TV market so far this year, maintaining the top position. Its market share expanded by one percentage point from last year, as TV sales rapidly rose this year amid stay-at-home trends due to the pandemic.

LG Electronics is anticipated to surpass 3 trillion won in annual operating profit for the first time.

Its third-quarter operating profit is estimated to be around 832 billion won, up 6.5 percent from the same period last year.

“As people spend more time at home than before, demand for home appliances has been high to replace old ones with new ones, which would directly lead to a better profit for companies like Samsung and LG,” an industry official explained.

Samsung and LG plan to release preliminary earnings Thursday.

By Song Su-hyun (song@heraldcorp.com)