Samsung Electronics' earnings estimate in the second quarter of this year beat expectations, thanks to solid demand for semiconductor chips, as the COVID-19 pandemic encouraged more of a non-contact lifestyle.
In its earnings guidance on Tuesday, the tech giant said its operating profit for the April to June period this year was an estimated six.eight billion U.S. dollars.
This is a 22.seven-three percent increase from the same period last year, when it was roughly five-and-a-half billion dollars.
But COVID-19-induced shutdowns dragged down Samsung's sales 7.three-six percent on-year to an estimated 43.6 billion dollars.
"Samsung Electronics' better-than-expected chip business appears to be behind the company's overall performance amid the COVID-19 pandemic."
"Samsung Electronics' second quarter earnings were better than expected, thanks to a rise in memory chip prices amid the increase in non-contact activities. The company's semiconductor earnings might be stagnant in the third quarter, but with the smartphone and display sectors expecting solid results, the third quarter earnings overall are likely to further improve."
But with the prolonged COVID-19 pandemic, and the bitter U.S.-China relationship, there are still downside risks.
"The global economic fallout from the COVID-19 pandemic still exists. On top of that, there's also the risk of the semiconductor and display sector facing a downturn if U.S. sanctions fully hit Huawei in September."
Meanwhile, LG Electronics posted an earnings decline for the second quarter, but still was above market consensus, thanks to its home appliance business exceeding expectations.
The company's guidance report said its operating profit estimate in the second quarter was down 24.4 percent on-year and sales were down 17.9 percent.
The two companies will release their finalized figures later this month.
Kim Jae-hee, Arirang News.