Samsung Electronics is projecting a great 3rd quarter as it announced that estimates are better than they expected. As an added bonus, the South Korean tech company is also enjoying a surge on its shares.
According to Reuters, Samsung forecasts a big jump on its quarterly profit, exceeding expectations and sending its shares surging as favorable currency rates and strong component sales appeared to have offset the weakness in smartphones sales.
As for the extent of the expected quarterly profit gain, it will be more than enough to address concerns that the tech giant's earnings cannot remedy the loss of its smartphone market share to Apple Inc. on the premium segment and to Chinese rivals at the low end market.
Samsung estimated that the July to September operating profit would jump 80 percent from a year earlier to $6.3 billion, higher than the $5.8 billion profit estimate by Thomson Reuters.
As reported by Seating Chair, analysts are attributing much of the earnings to the weak Korean Won. In addition, Samsung's shares were also on track for its biggest daily percentage gain in almost four years in midday trade, as investors saw an end to successive quarters of declining earnings.
According to Park Gang-ho, an analyst at Daishin Securities, "The favorable won-dollar exchange rates also positively affected its earnings."
As for its net profit and earnings breakdowns, Samsung will announce the numbers for each of its business divisions later this October.
Furthermore, in a report by Herald Current, Samsung is suffering from the declining sales of smartphones. As noted by an analyst, "The smartphone division is on a gradual downward trend due to competition and commoditisation."
As a result, Samsung is under a new pricing scheme. The 32GB Galaxy S6 is now priced at 779,900 won from 858,000 won, while the price of a 64 gigabyte model is lowered at 799,700 won from 923,000 won.
Samsung declined to comment directly on the price cuts.