Samsung Reports Record Q3 Revenue of 195.3 Trillion Won
Despite record earnings, Samsung's shares fell 6% due to net profit missing estimates amid rising costs.
Samsung's Q3 operating profit reached 107.4 trillion won, up 783% year-on-year.
Net profit of 75.1 trillion won fell short of Bloomberg's estimate of 89.06 trillion won.
The mobile division reported an operating loss of 800 billion won, raising concerns about future growth.
Samsung Electronics announced its third-quarter earnings on Thursday, reporting an unprecedented revenue of 195.3 trillion won ($145.6 billion) for the period from July to September. The company achieved an operating profit of 107.4 trillion won, marking a staggering increase of 783% compared to the same quarter last year. However, despite these impressive figures, Samsung's shares experienced a 6% decline as the net profit of 75.1 trillion won fell significantly short of market expectations.
The surge in revenue was primarily driven by the booming demand for artificial intelligence infrastructure, which propelled earnings in Samsung's memory chip sector to new heights. The semiconductor division recorded an operating profit of 106.5 trillion won, although this figure also did not meet Bloomberg's forecast of 108.45 trillion won. Analysts pointed out that the company's overall net profit was adversely affected by a substantial loss of 9.5 trillion won related to financing and income.
Samsung's cash flow from operating activities showed a decline, dropping to 98.6 trillion won in Q3 from 105.1 trillion won in the previous quarter. This decline raises concerns regarding the company's shareholder return plans, which are closely linked to its cash levels. Samsung has committed to returning 30 trillion won to shareholders for the third quarter, with plans for substantial share repurchases and dividends in the future.
The implications of these earnings are significant for Samsung and the broader technology sector. The company anticipates that memory markets will remain tight through 2028, driven by the ongoing demand for AI technologies. Samsung's executives noted that they will begin mass production of advanced high-bandwidth memory (HBM4E) in 2027, with all supply already sold out at agreed prices, indicating a strong future outlook for this segment.
Looking ahead, Samsung's capital expenditures are projected to increase sharply to 84.4 trillion won in 2026, reflecting the company's strategy to enhance production capacity amid rising memory demand. However, the mobile division's operating loss of 800 billion won raises questions about the company's growth potential beyond its semiconductor business, especially as it faces challenges from rising component costs and competition in the mobile market.
