Samsung Q3 results

Samsung Electronics said its total earnings for the just reported quarter that ended in September saw an increase of 58% from the same period a year ago, according to the company on Thursday.

The tech giant’s operating profit for the quarter was approximately 12.3 trillion Korean won (about $10.6 billion) up from 7.78 trillion Korean won the same period a year ago. Consolidated shares were about 66 trillion won for the quarter, up nearly 6.5% from 62 trillion won a year ago. The Q3 result beat analysts’ expectations of 10.5 trillion won, according to data from Refinitv.

During early Thursday trading, Samsung shares were down 0.33%, as trailing South Korea’s benchmark index was flat.

While the quarter ended very well for Samsung, it failed to provide a breakdown of the performance of each business unit. Some analysts earlier predicted that the quarter ending September would be driven by the company’s smartphone unit in the second half of the year.

“I think a large part of its seems to be smartphone units were up a lot. We did have a chance to talk to the company briefly this morning and seems like the smartphone units have been very, very strong in Q3,” said Mark Newman, managing director, and senior analyst at Bernstein.

Newman also said the company’s networking equipment business is also performing well as it gains market shares from Hauwei 5G equipment sales. Last month, Samsung announced that it was awarded a $6.6 billion contract to supply Verizon with equipment.

“So I think smartphones, telecom equipment and a bit of semiconductor are the main reasons for the beat,” Newman added.

The company’s business units like the consumer electronics and home appliances also contributed to its strong earnings for the just-concluded quarter, according to SK Kim, the executive director at Daiwa Securities.

Kim told CNBC on Thursday that Samsung’s third-quarter earnings was driven by an improvement in its cost structure, and its strategic move to online marketing platforms amid the coronavirus pandemic.

However, the company’s semiconductor business which is also its main profit-making business was affected by low memory chip prices. According to a report from semiconductor researcher TrendForce, the average selling price for memory chips is expected to remain low in the fourth quarter of 2020. However, it didn’t stop the South Korean tech giant from achieving its goal for the third quarter. Daiwa added that Samsung is likely to see a jump in the fourth quarter as iPhone prepares to launch its iPhone 12 models next month—Samsung is a supplier of the high-end display screens used on iPhones.