Samsung narrows losses as ‘signs of life’ emerge from dead smartphone market
Samsung has posted slimmer than expected losses as beleaguered smartphone and chip markets show signs of recovery.
Shares in the South Korean tech giant jumped more than 3.3 per cent on Wednesday after it said its profit fell 78 per cent in the three months to September, an improvement on its record 95 per cent plunge in the previous quarter.
Samsung has estimated in a short preliminary report its operating income dropped to about 2.4 trillion won (£1.5bn) in its third quarter, down from 10.85 trillion won (£6.59bn) a year earlier.
The chip and smartphone maker said its sales likely fell 13 per cent from the same period a year earlier to 67 trillion (£407bn) won.
“On the surface Samsung delivered a weak set of quarterly numbers today, but dig a little deeper and there are signs of life in what has been a difficult market,” said Ben Barringer, equity research analyst at Quilter Cheviot.
“The picture is improving and suggests a trough has been reached. The market has subsequently agreed and the stock is up as a result, despite the numbers looking weak,” he added.
It comes amid an industry-wide decline for computer and smartphone manufacturers, who have been reducing their chip orders due to weak demand for electronic devices.
Ko Yeongmin, an analyst at Daol Investment & Securities, told Reuters: “It’s better than expected. Although the situation is not great in the chip business… the decline in memory prices is easing, and further drops will be limited.”
In March, Samsung announced it will pour 300 trillion won (£1.8bn) into its chip business over the next 20 years, as it looks to step up its pace in the ongoing artificial intelligence race among tech companies.