Samsung Electronics recorded 'earning surprise' performance that surpassed market expectations in the second quarter. In particular, it is believed that the strong performance of its semiconductor business due to the 'untact' phenomenon caused by the COVID-19 incident has driven such performance.
Samsung Electronics made a preliminary announcement on July 7 that it posted 52 trillion won ($43.3 billion) in sales and 8.1 trillion won ($6.7 billion) in operating profit in the second quarter on a consolidated basis.
Compared to the same period last year, sales fell 7.4 percent, but operating profit increased 22.7 percent. Compared to the previous quarter, sales fell 6 percent, but operating profit increased 25.6 percent.
Operating profit ratio, which is the ratio of operating profit to sales, stood at 15.6 percent, the highest since 24.2 percent in the fourth quarter of 2018.
Despite the decrease in smartphone sales, the increase in untact demands from server and PC companies such as telecommuting, online classes, video conferencing, and games caused by the COVID-19 is attributable to the better-than expected performance.
As demands for semiconductors have been solidly supported, prices of fixed DRAM transactions, which are the main products of South Korean semiconductor companies such as Samsung Electronics, have also risen for five consecutive months until May, affecting performance improvement.
Consumer electronics (CE) and mobile devices, including TVs, seem to have performed well compared to market concerns as sales increased due to the reopening of offline stores by large home appliance distributors such as Best Buy in the U.S. and Seconomy in Europe in June.
The mobile (IM) sector was also expected to show poor performance due to sluggish sales of the Galaxy S20, but industry watchers say it has been relatively good since June as sales have increased.
Above all, both wireless and home appliance divisions have reduced marketing costs due to the closure of offline stores, and their operating profit and operating profit ratios have improved.
Experts predict that Samsung Electronics will improve its performance in the third quarter compared to the second quarter.
Considering the one-off profit in the display sector that was based on the second quarter, there is a high possibility that the third quarter's performance will end up at the second quarter level.
