SEOUL, SOUTH KOREA—Samsung Electronics on Wednesday posted record quarterly operating and net profits as solid demand for its memory chips cushioned the fallout from slowing smartphone sales—but warned of tougher times ahead.
The South Korean tech giant—the world’s top maker of smartphones and memory chips–has recovered from a series of setbacks, including a humiliating recall and the jailing of its de facto chief, to post a series of record-breaking numbers.
The profits have been driven by its mighty semiconductor unit, which provides chips for its own devices as well as competitors including Apple.
But that run was coming to an end, Samsung signaled in a statement, saying it expected “overall earnings across the company to decline” in the fourth quarter because of seasonal factors in the semiconductor market.
Going into 2019, “earnings are forecast to be weak for the first quarter” for the same reason, it added, before business conditions improved.
For July-September, Samsung reported an operating profit of 17.6 trillion won ($15.4 billion), up 21 percent from a year ago and a an all-time higher for any quarter.
Net profit also jumped 17.5 percent to 13.1 trillion won, also a record, while sales rose 5.5 percent to 65.4 trillion won.
“It was in line with expectation but this will be the peak,” Greg Roh of HMC Securities & Investment told AFP.
“I’m expecting a decrease in the fourth quarter across the company including semiconductors and smartphones to around 16.6 trillion won,” he said.
The figures—in line with estimates announced earlier this month—were “driven mainly by the continued strength of the memory (chip) business”, Samsung said.
The unit dominates the global market and the firm has invested tens of billions of dollars each year to build and expand its factories.
The division reported an operating profit of 13.6 trillion won, the second consecutive quarterly record, offsetting sagging profits at the mobile phone division.
Mobile handsets once contributed the lion’s share of Samsung Electronics’ overall sales and profit, but the unit reported a third-quarter operating profit of only 2.22 trillion won, down 33 percent year-on-year.