Samsung Posts Another Record Profit For Q3 2018

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In short: Samsung on Friday published its preliminary financial report for the third quarter of the year, estimating it generated the equivalent of $57.5 million in sales with approximately $15.5 billion in profit over the three-month period ending September 30. The results are in line with recent analyst projections and mark another episode of record profits for the South Korean company whose second-quarter results ended up being slightly underwhelming, at least in the consumer electronics department where the Galaxy S9 line ended up falling short of sales expectations. Samsung will provide a breakdown of its earnings later this month as part of its full consolidated financial report for the recently concluded period.

Background: Despite a highly positive result, most industry watchers agree Samsung’s commercial performance has peaked, largely because its main growth segment — chips — now appears to be set for a period of decline, with demand for both NAND flash modules and DRAM dropping, consequently leading to a decrease in prices. Samsung is believed to be anticipating such a development as well but insists it’s positioned for long-term growth and generally isn’t concerned about the drop-off in the silicon business, according to its recent financial reports and statements from company officials.

Impact: Samsung’s quarter-three results are likely marking an all-time high for the company in terms of profits as its chip margins are set to decline due to a drop in demand. Its business likely won’t experience any near-term effects of such a development and its stock should remain stable, or at least unaffected by lower profits that are likely to be generated over the final quarter of the year. As 2019 will mark the company’s entry point into 5G, in-display fingerprint readers, and foldable displays for smartphones, its mobile unit may end up contributing to its performance more than it did this year.