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Samsung's better than expected performance gives hope to the big tech
 The group surprised in a preliminary release with a better than expected profit in the second quarter helped by an increase in internet traffic and the increasing demand for chips and gadgets 07.Jul.20 8:05 AM By Shawn Highstraw Photo toinnov.com |
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Tech giant Samsung seems to be recovering from the previous slump due to the corona crisis. The group surprised in a preliminary release with a better than expected profit in the second quarter helped by an increase in internet traffic and the increasing demand for chips and gadgets. The world's largest manufacturer of memory chips and smartphones expects to record an operating profit of 8.1 trillion won (more than 6 billion euros) in the measurement period. That would be an increase of 23 percent. Sales are expected to fall 7 percent lower at 52 trillion won. Samsung did not report a net result, nor did it disclose performance by division. Samsung will do this later this month with the final figures. The profit figure now also includes a one-off windfall in connection with the display activities. Competitor Apple has to compensate Samsung for fewer display deliveries than agreed due to disappointing sales of iPhones. The amount of the compensation is unknown. According to experts, this is an amount of 1 trillion won against 800 billion won a year earlier. The strong performance of the South Korean group seems to suggest that the tech sector may soon overcome the impact of the corona crisis. The shift towards online activities such as video conferences, online education and event streaming has also accelerated. This ensures that there is extra demand for products from, among others, Samsung, which also makes chips for data centers. Samsung had previously warned against a fall in profit in the second quarter. The pandemic forced shops and factories to close. As a compensation, the company cut its marketing expenses and focused more on selling to consumers who needed to stay at home more. Samsung's better-than-expected results come amid the legal issue surrounding the top of the company. Vice President Lee Jae-yong is suspected of fraud, illegal stock trading and violation of rules surrounding a merger in 2015. He had been in prison for a year earlier, suspected of bribing people in an attempt to become Samsung's new chairman. That case was suspended in 2018, but the Supreme Court recently withdrew that suspension. | |
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